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a Swifty Corporation entered into a lease agreement on January 1, 2020, to provide Wildhorse Company with a piece of machinery, The terms of the lease agreement were as follows. 1 2 3 The lease is to be for 3 years with rental payments of $9,135 to be made at the beginning of each year. The machinery has a fair value of $64.000, a book value of $46,400, an end-of-life salvage value of $0, and an economic life of 8 years. At the end of the lease term, both parties expect the machinery to have a residual value of $41,800, none of which is guaranteed. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not ot a specialized nature. The implicitrate is 5%, which is known by Wildhorse. Collectibility of the payments is probable. Assume that the lessor uses straight-line depreciation. 4. 5. 6. 2 Prepare the amortization schedules Wildhorse will use over the lease term WILDHORSECOMPANY Lease Amortization Schedule Annuity-Due Basis Interest Reduction of on Liability Lease Liability Lease Liz Date Annual Payment $ 1/1/20 1/1/20 1/1/21 11/22 WILDHORSECOMPANY Lease Expense Schedule (A) Straight-Line Expense (B) Interest on Lease Liability (C) Amortization of Right-of-Use Asset (and Liability) (A-B) Date $ 1/1/20 12/31/20 $ $ 12/31/21 12/31/22

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