I need help forming the amortization schedule, thanks! Techprod sells computer systems....
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I need help forming the amortization schedule, thanks!
Techprod sells computer systems. Techprod leases computers to Kansas Prairie Company on January 1, 2016. The manufacturing cost of the computers was $12 million. The computers are not of a specialized nature-in other words, they can be resold after the lease term ends. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2016; remaining payments at June 30 and December 31 each year through June 30, 2020. Lease term: five years (10 semiannual payments). No residual value; no bargain purchase option. Economic life of equipment: five years Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2016: $20 million. Collectibility of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred
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