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1 2 Sunland Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement, The lease termis
1 2 Sunland Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement, The lease termis Syears with equal annual rental payments of 54,068 at the beginning of each year. Ownership does not transfer at the end of the lease term. there is no bargain purchase option, and the asset is not of a Specialized nature The building has a tale value of $20.200, a book value to Sunland of 513,200, and a useful life of 6 years At the end of the base term. Sunland and Walsh expect there to be an uniguaranteed residual value of $3,300 Suntand wants to earn a return of 7% on the lease, and collectibility of the payments is probable. This rate is known by Walsh 3 4 5 (b) Using the original facts of the lease, show the journal entries to be made by both Sunland and Walsh in 2020. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to decimal places, eg. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Sunland Journal Entries Debit Date Account Titles and Explanation (To record the lease) (To record lease payment) Walsh's Journal Entries Debit Date Account Titles and Explanation (To record the lease) (To record lease payment) (To record interest expense) (To record amortization of the right-of-use asset)
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