The information below relates to a leasing arrangement between Coley Leasing Company and Franklin Company, a lessee.

Inception date - January 1, 2017

Lease term - 5 years

Annual lease payment due at the beginning of each year, beginning with January 1, 2017 - $188,022

Fair value of asset at January 1, 2017 - $850,000

Economic life of leased equipment - 6 years

Residual value of equipment at end of lease term, guaranteed by the lessee - $106,250

Lessors implicit rate - 10%

Lessees incremental borrowing rate - 12%

January 1, 2017

The lessee assumes responsibility for all executary costs, which are expected to amount to $12,500 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $106,250. The lessee uses the straight line depreciation method for all equipment.

a) Prepare the 5-year lease amortization schedule for Franklin Company.