Advanced Accounting II Chapter 21 - Leases Problem 1. On January 1, 2019, Wilcox The noncancelable lease is for 6 years ruary 1, 2019, Wilcox Inc, leased equipment from Zed Co. for use in the engineering department le case is for 6 years with an unguaranteed residual value of $5,000 and the estimated economic life of the lens me of the leased equipment is 10 vers. The lease does not contain automatic title transfer OT ise does not contain automatie title transfer or a bargain purchase option. Lease payments are $9,000 per year e payments are $9,000 per year, navable each December 31. The incremental borrowing rate for Wilcox is 8 percent and Zed's implicit interest rate (know int and Zed's implicit interest rate (known by Wilcox) is 6 percent. Wilcox uses straight-line depreciation equipment. To Zed, the equipment had a cost of $44.000 and fair value of $48,000. The collectability of the lease payments is probable for the lessor. Instructions Provide the necessary journal entries to record the transactions for the lessee and lessor for the period January , 2019 through December 31, 2020