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

Commencement date		January 1, 2017
Annual lease payment due at the beginning of each year, beginning with January 1, 2017		$127,244
Residual value of equipment at end of lease term, guaranteed by the lessee		$45,000
Expected residual value of equipment at end of lease term		$40,000
Lease term		6	years
Economic life of leased equipment		6	years
Fair value of asset at January 1, 2017		$635,000
Lessors implicit rate		10	%
Lessees incremental borrowing rate		10	%

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.

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.)

b) 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.)