Buffalo Dairy leases its milking equipment from Carla Finance Company under the following lease terms. 1. The lease term is 10 years, noncancelable, and requires equal rental payments of $27.700 due at the beginning of each year starting January 1, 2020 2. The equipment has a fair value at the commencement of the lease (January 1, 2020) of $209.910 and a cost of $236,000 on Carla Finance's books. It also has an estimated economic life of 15 years and an expected residual value of $13,900, though Buffalo Dairy has guaranteed a residual value of $19,800 to Carla Finance The lease contains no renewal options, and the equipment reverts to Carla Finance upon termination of the lease. The equipment is not of a specialized use. 4. Buffalo Dairy's incremental borrowing rate is 8% per year. The implicit rate is also 8%. Buffalo Dairy depreciates similar equipment that it owns on a straight-line basis. Collectibility of the payments is probable. 3. 5. 6. Prepare the journal entries for the lessee and lessor at January 1, 2020, and December 31, 2020 (the lessee's and lessor's year- end). Assume no reversing 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 for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25125 and final answers to decimal places, e3.5,250.) Date Account Titles and Explanation Debit Credit Lessee: (To record the lease.) (To record lease payment.) Lesson (To record the lease.) (To record lease payment.) Lessee: (To record interest.) (To record amortization.) Lessor List of Accounts Save for Later Attempts: 0 of 1 used Submit