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The following facts pertain to a noncancelable lease agreement between Bramble Leasing Company and Sunland Company, a lessee. Inception date: May 1, 2017 Annual lease
The following facts pertain to a noncancelable lease agreement between Bramble Leasing Company and Sunland Company, a lessee.
Inception date: | May 1, 2017 | ||
Annual lease payment due at the beginning of | |||
each year, beginning with May 1, 2017 | $19,153.46 | ||
Bargain-purchase option price at end of lease term | $4,300 | ||
Lease term | 5 | years | |
Economic life of leased equipment | 10 | years | |
Lessors cost | $69,000 | ||
Fair value of asset at May 1, 2017 | $84,000 | ||
Lessors implicit rate | 9 | % | |
Lessees incremental borrowing rate | 9 | % |
The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. The expected residual value of the equipment at the end of 5 (10) years is $12,000 ($0).
Prepare a lease amortization schedule for Sunland Company for the 5-year lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25126 and Round answers to 2 decimal places, e.g. 15.25.) SUNLAND COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Plus BP Interest on Liability Reduction of Lease LiabilityLease Liability Date 5/1/20 5/1/21 /30/22
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