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How amortization schedule that would be suitable for lessee

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The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pearl Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $125,122 Residual value of equipment at end of lease term, guaranteed by the lessee $54,000 Expected residual value of equipment at end of lease term $49,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, $644,000 Lessor's implicit rate 9 % Lessee's incremental borrowing rate 9 % 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.

Question 1: How an amortization schedule that would be suitable for the lessee for the lease term is calculated?

Reference no: EM132920938

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