The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Flounder Company, a lessee. January 1, $121,803 Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term. guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1. Lessor's implicitrate Lessee's incremental borrowing rate $46,000 $41,000 6 years 6 years $623,000 9 % The asset will revert to the lessor at the end of the case 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, eg. 1.25124 and the final answers to decimal places eg. 5,275.) FLOUNDER COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability anual Lease nent Plus GRV Lease Liability 121803 0 121803 121803 121803 121803 121803 121803 5000 0 735818 $ $ Date Debit Credit Account Titles and Explanation Leased Equipment Jan. 1.2020 Lease Liability (To record the lease.) Lease Liability Jan. 1.2020 V Cash Dec 31, 2020 (To record first lease payment.) Interest Expense Lease Liability (To record interest.) Dec 31, 2020 Deprecation Expense Accumulated Depreciation Leased Equipment (To record amortization) Jan. 1. 2021 Lease Liability (To record second lease payment.) Dec 31, 2021 Interest Expen Lease Llability (To record interest.) Depreciation Expense Dec.31. 2021 Accumulated Depreciation Equipment (To record amortization) Suppose Flounder 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 $ Lease Liability $ What if Flounder prepaid rent of $5,000 to Faldo? $ Right-of-use asset Lease Liability $