Assume that on December 31, 2019, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement. 1. 2. 3. The agreement requires equal rental payments of $66,074 beginning on December 31, 2019. The fair value of the building on December 31, 2019 is $483,462. The building has an estimated economic life of 12 years, a guaranteed residual value of $10,000, and an expected residual value of $8,000. Kimberly-Clark depreciates similar buildings on the straight-line method. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor. Kimberly-Clark's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Kimberly-Clark. 4. 4 5. 5. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) . Your answer is partially correct. 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 2019, 2020, and 2021. Kimberly-Clark's fiscal year-end is December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to decimal places eg. 5,275.) e Account Titles and Explanation Debit Credit Right-of-Use Asset 479,757 Lease Liability 479.757 (To record the lease) v K Lease Liability 66,074 Cash 66,074 (To record first lease payment) Amortization Expense 47,976 Right-of-Use Asset 47.976 (To record amortization of the right-of-use asset) v El Lease Liability Interest Expense Cash 66,074 (To record interest expense) Amortization Expense 47,976 Right-of-Use Asset - 47.976 (To record amortization of the right-of-use asset) -) v Interest Expense Lease Liability Cash 66,074 (To record interest expense)