The following facts pertain to a non cancelable lease agreement between Faldo Leasing Company and Riverbed Company, a lessee Commencement date January 1, 2017 Annual lease payment due at the beginning of each year, beginning with January 1, 2017 $ 116,249 Residual value of equipment at end of lease term, guaranteed by the lessee $ 54,000 Expected residual value of equipment at end of lease term $ 49,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2017 $ 644,000 Lessors implicit rate 6 Lessees incremental borrowing rate 6 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 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 ) RIVERBED COMPANY (Lessee) Lease Amortization Schedule Date Annual Lease Payment Plus GRV Interest on Liability Reduction of Lease Liability Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease Assume the lessees annual accounting period ends on December 31 (Credit account titles are automatically indented when amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts Round answers to 0 decimal places e g 5,275 Record journal entries in the order presented in the problem ) TO RECORD THE LEASE TO RECORD THE LEASE PAYMENT TO RECORD THE INTEREST TO RECORD THE AMORTIZATION TO REVERSE THE DECEMBER 31 ENTRY TO RECORD THE SECOND LEASE PAYMENT TO RECORD THE INTEREST TO RECORD AMORTIZATION Suppose Riverbed received a lease incentive of $ 5,000 from Faldo Leasing to enter the lease How would the initial measurement of the lease liability and right of use asset be affected Right of use asset $ What if Riverbed prepaid rent of $ 5,000 to Faldo Right of use asset $

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The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Riverbed Company, a lessee. Commencement date January 1, 2017 Annual lease

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

Commencement date	January 1, 2017
Annual lease payment due at the beginning of each year, beginning with January 1, 2017	$ 116,249
Residual value of equipment at end of lease term, guaranteed by the lessee	$ 54,000
Expected residual value of equipment at end of lease term	$ 49,000
Lease term	6	years
Economic life of leased equipment	6	years
Fair value of asset at January 1, 2017	$ 644,000
Lessors implicit rate	6	%
Lessees incremental borrowing rate	6	%

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.

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.)

RIVERBED COMPANY (Lessee) Lease Amortization Schedule
Date		Annual Lease Payment Plus GRV		Interest on Liability		Reduction of Lease Liability

Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessees annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.)

TO RECORD THE LEASE

TO RECORD THE LEASE PAYMENT

TO RECORD THE INTEREST

TO RECORD THE AMORTIZATION

TO REVERSE THE DECEMBER 31 ENTRY

TO RECORD THE SECOND LEASE PAYMENT

TO RECORD THE INTEREST

TO RECORD AMORTIZATION

Suppose Riverbed received a lease incentive of $ 5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected?

Right-of-use asset

What if Riverbed prepaid rent of $ 5,000 to Faldo?

Right-of-use asset