Assume that on January 1, 2021, Shamrock Corporation sells equipment to Pharoah Finance Co. for $1,700,000 and immediately leases back the equipment. The relevant information is as follows. 1. 2. 3. 4. 5. The equipment was carried on Shamrocks books at a value of $1,500,000. The term of the non-cancelable lease is 3 years; title will not transfer to Shamrocks, and the expected residual value at the end of the lease is 1,125,000, all of which is unguaranteed. The lease agreement requires equal rental payments of 5277,635 at the beginning of each year. The incremental borrowing rate for Shamrock is 8%. Shamrock is aware that Pharoah Finance set the annual rental to ensure a rate of return of 8%. The equipment has a fair value of $1,700,000 on January 1, 2021, and an estimated economic life of 10 years. Click here to view factor tables. Prepare the journal entries for both the lessee and the lessor for 2021 to reflect the sale and leaseback agreement. (Credit account titles are automatically indented when amount is entered. presented in the problem.) Debit Credit Date Account Titles and Explanation Shamrock Corporation (Seller-Lessee) (To record sale) (To record lease) HHH HH HH HHH (To record first lease payment) Debit Credit Date Account Titles and Explanation Pharoah Corporation (Buyer-Lessor) (To record purchase) Debit Date Account Titles and Explanation Pharoah Corporation (Buyer-Lessor) De Credit (To record purchase) LE (To record lease payments) (To record lease revenue) (To record depreciation) Assume that on January 1, 2021, Shamrock Corporation w o men to Pharoah Finance Co. for $1,200,000 and immediately have back the qument. The devant information is as follows. Twi n wird umrock books at a value of $1,500,000 2. The hof the non-cincate is 3 years, the will not transfer to shamrocks, and the expected residual value at the end of th i s 1,125,000, all of which sunqurand. 1. The lat arital piye Sasts yar. incrementalnog role for mac Shamrock t hal Pharoah FinS t atore are o return of 8% 5. The quipment has a fair value of $1,700,000 on January 1, 2021, and an emaid economic life of 10 years. back agrement. (Credit account tits are automatically included wire amount is entered. Do not indul mawally. Hecord journal entre in the order Prepare the journaler for both the law and the scor fow 2021 to vollect the sale and Date Account Titles and Explanation Dubit Shamrock Corporation (Seller-Lusse) Credit (Tasak) (Tocada (Tacod fit pa Account Ticles and Explanation Pharoah Corporation (Buyer Lessor) (Yoncord purch (Torced ) (Torced den