Assume that on December $31,2024,$ Kirnberly$-$Clark Corp. signs a $10-$year, non$-$cancelable lease agreement to lease a storage building from Sandhill Storage Company. The following information pertains to this lease agreement.

The agreement requires equal rental payments of $$66,999$ beginning on December $31,2024.$

The fair value of the building on December $31,2024,$ is $$490,629.$

The building has an estimated economic life of $12$ years, a guaranteed residual value of $$11,000,$ and an expected residual value of $$8,100.$ Kimberly$-$Clark depreciates similar buildings on the straight$-$line method.

The lease is nonrenewable. At the termination of the lease, the building rever's to the lessor.

Kimberly$-$Clark's incremental borrowing rate is $8\%$ per year. The lessor's implicit rate is not known by Kimberly$-$Clark

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$($For calculation purposes, use $5$ decimal places as displayed in the factor table provided$)$

$($a$)$

Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years $2024,2025,$ and $2026.$ Kimberly$-$Clark's fiscal year$-$end is December $31,($List aff debit entries before creditentries. Credit account titles are qutomatically indented when 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 O decimal places eg$.5,275.)$

Date Account Titles and Explanation

Debit

Credil

$\frac{12}{31}\frac{?}{24}$

Right$-$of$-$Use Asset

Lease Liability

$($To record the lease$)$