Solution-Prepare amortization schedule that be suitable for

Prepare amortization schedule that be suitable for lessee

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Reference no: EM132968323

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

Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $106,838

Residual value of equipment at end of lease term, guaranteed by the lessee $53,000

Expected residual value of equipment at end of lease term $48,000

Lease term 6years

Economic life of leased equipment 6years

Fair value of asset at January 1, $554,000

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.

Problem 1: Prepare an amortization schedule that would be suitable for the lessee for the lease term.

Reference no: EM132968323

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Prepare amortization schedule that be suitable for lessee

Reference no: EM132968323

Reference no: EM132968323

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