A) On January 1, 2020, Blue Inc. sold computer equipment to Larkspur Co. The sales price of the equipment was $511,000 and its carrying amount is $396,000. Record any journal entries necessary for Blue from the sale of the computer equipment in 2020.

Use the information from part a. Assume that, on the same day the sale occurred, Blue enters into an agreement to lease the equipment from Larkspur for 10 years with annual lease payments of $69,428.50 at the end of each year, beginning on December 31, 2020. If Blue has an incremental borrowing rate of 6% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Blue from the sale and leaseback of computer equipment in 2020