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Problem 21A-1 a-cThe following facts pertain to a non-cancelable lease agreementbetween Faldo Leasing Company and Windsor Company, a lessee.Commencement dateJanuary 1, 2017Annual lease payment due at the beginning of each year, beginning with January 1, 2017$119,345Residual value of equipment at end of lease term, guaranteed by the lessee$50,000Expected residual value of equipment at end of lease term$45,000Lease term6yearsEconomic life of leased equipment6yearsFair value of asset at January 1, 2017$642,000Lessor’s implicit rate7%Lessee’s incremental borrowing rate7%.he asset will revert to the lessor at the end of the leaseterm. The lessee uses the straight-line amortization for all leasedequipment.WINDSOR COMPANY (Lessee)Lease AmortizationScheduleDateAnnual LeaseInterest onReduction of LeaseLease LiabilityPayment Plus GRVLiabilityLiability1/1/20171/1/20171/1/20181/1/20191/1/20201/1/20211/1/202212/31/2022