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

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Flounder Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $95,499 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, $550,000 Lessors implicit rate 5 % Lessees incremental borrowing rate 5 % 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.

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Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 1.25124 and the final answers to O decimal places e.g. 5,275.) FLOUNDER COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability Annual Lease Payment Plus GRV Lease Liability Date 1/1/20 1/1/20 95499 95499 1/1/21 95499 XXXPXPXPX 1/1/22 95499 1/1/23 95499 1/1/24 95499 1/1/25 95499 12/31/26 5000 577994 Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and a annual accounting period ends on December 31. (Credit account titles are automatically indented when an is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O the order presented in the problem.) Date Account Titles and Explanation Debit Credit * * (To record the lease.) (To record first lease payment.) (To record interest.) xWxE (To record second lease payment.) (To record interest.) (To record amortization.)

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