Assume that IBM leased equipment that was carried at a cost of $$110,000$ to Sunland Company. The term of the lease is $5$ years beginning December $31,2024,$ with equal rental payments of $$30,200$ beginning December $31,2024.$ The fair value of the equipment at commencement of the lease is $$130,226.$ The equipment has a useful life of $5$ 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.

Prepare IBM's December $31,2024,$ journal entries at commencement of the lease.Assume that IBM leased equipment that was carried at a cost of $$110,000$ to Sunland Company. The term of the lease is $5$ years

beginning December $31,2024,$ with equal rental payments of $$30,200$ beginning December $31,2024.$ The fair value of the equipment

at commencement of the lease is $$130,226.$ The equipment has a useful life of $5$ 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.

Prepare IBM's December $31,2024,$ journal entries at commencement of the lease. $($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. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round

final answers to $0$ decimal places e$.8\mathrm{.}5,275.)$

Click here to view factor tables.

$($To record receipt of lease payment$)$