#6

Your answer is partially correct. Stellar Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $39,800 each, beginning December 31, 2019. In addition, Stellar guarantees the lessor a residual value of $21,100 at the end of the lease. However, Stellar believes it is probable that the expected residual value at the end of the lease term will be $10,550. The equipment has a useful life of 6 years. Prepare Stellars' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Stellar. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Click here to view factor tables. Date Account Titles and Explanation Debit Credit December 31, 2019 Leased Equipment 202584 Lease Liability 202584 (To record the lease liability) December 31, 2019 Lease Liability 39800 Cash 39800 (To record lease payment)