The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sandhill Company, a lessee.

Commencement date		January 1,
Annual lease payment due at the beginning of each year, beginning with January 1,		$126,840
Residual value of equipment at end of lease term, guaranteed by the lessee		$55,000
Expected residual value of equipment at end of lease term		$50,000
Lease term		6	years
Economic life of leased equipment		6	years
Fair value of asset at January 1,		$653,000
Lessors implicit rate		9	%
Lessees incremental borrowing rate		9	%

The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view factor tables.

(a)

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.)

Show the workings, please