Brief Exercise 21A-16 Your answer is partially correct. Try again. Sheffield Corporation leases equipment from Falls Company on January 1, 2017. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment's 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. Prepare Sheffield's journal entries on January 1, 2017, and December 31, 2017. Assume the annual lease payment is $40,000 at the beginning of each year, and Sheffield's incremental borrowing rate is 5%, which is the same as the lessor's implicit rate. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,265.) e.g. 5,265.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit 1/1/17 Right-of-Use Asset 113336 T Lease Liability T. Di 113331 113336 (To record lease liability) - 1/1/17 TLease Liability 100 Cash 40000 (To record lease payment) 12/31/17 Lease Expense 40000 Lease Liability 3667 Right-of-Use Asset Right-of-Use Asset 36333 Click if you would like to Show Work for this question: Open Show Work