(a) Your answer is correct. On January 1, 2025, Ayayai Inc. sold computer equipment to Kingbird Co. The sales price of the equipment was $510,000 and its carrying amount is $390,000. Record any journal entries necessary for Ayayai from the sale of the computer equipment in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 5,275.25.) Date Account Titles and Explanation 1/1/25 Cash Equipment Gain on Disposal of Equipment Debit 510000 Credit 390000 120000 (b) Your Answer Correct Answer Your answer is correct. Use the information from part a. Assume that, on the same day the sale occurred, Ayayai enters into an agreement to lease the equipment from Kingbird for 10 years with annual lease payments of $66,047.38 at the end of each year, beginning on December 31, 2025. If Ayayai has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Ayayai from the sale and leaseback of computer equipment in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) ate Account Titles and Explanation 25 Cash Notes Payable 125 Notes Payable Debit 510000 40547 Interest Expense 25500 Cash Credit 510000 66047.38 (c) Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $66,047.38 at the beginning of each year. Record any journal entries necessary for Ayayai from the sale and leaseback of computer equipment in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation (To record sale of equipment) (To record the lease) (To record lease payment) Debit Credit