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# I need to know if I calculated this amortization schedule as well as the current and long term portions of

liability properly.

Given information: "Six ovens were rented on December 31, with \$20,000 charged to rent expense. The lease runs for 6 years with an implicit interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries." - The balance sheet being prepared is for 2017, the same year the lease was taken out.

For the fair value calculation I think I need to take the \$20,000 payment and multiply it by the present value factor for an annuity due: 5.32948, which would give \$106,589.60.

Fair Value of Rental Agreement
Payment \$ 20,000.00
Implict Interest Rate
5%
PV factor of Annuity Due
5.32948
Fair Value \$ 106,589.60
Lease Amortiztion Schedule
Effective Decrease in Outstanding
Year
Payments
Interest
Balance
Balance
0
\$ 106,589.60
2017
\$ 20,000.00
\$ 20,000.00
\$ 86,589.60
2018
2
\$ 20,000.00
\$4,329.48
\$ 15,670.52
\$ 70,919.08
2019
3
\$ 20,000.00
\$3,545.95
\$ 16,454.05 \$ 54,465.03
2020
4
\$ 20,000.00
\$2,723.25 \$17,276.75 \$ 37,188.29
2021
5
\$ 20,000.00
\$ 1,859.41
\$ 18,140.59
\$ 19,047.70
2022
6
\$ 20,000.00 \$ 952.38
\$ 19,047.62
0.00
*Balance corrected for \$0.08 rounding error
Current Liability as of 12/31/17 \$ 15,670.52
Long-Term Liabili

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