Assume that IBM leased equipment that was carried at a cost of $$165,000$ to Cullumber Company. The term of the lease is $6$ years

beginning December $31,2024,$ with equal rental payments of $$39,057$ beginning December $31,2024.$ The fair value of the equipment

at commencement of the lease is $$195,000.$ The equipment has a useful life of $6$ years with no salvage value. The lease has an implicit

interest rate of $8\%,$ no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable. Assume

the sales$-$type lease was recorded at a present value of $$195,000.$

Prepare IBM's December $31,2025,$ entry to record the lease transaction with Cullumber Company. $($List all debit entries before credit

entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No

Entry" for the account titles and enter $0$ for the amounts. Round answers to $0$ decimal places e$.$g$.5,275.)$

Account Titles and Explanation

Debit

Credit