CA NET Question 16 Cullumber Company on January 1, 2021, enters into a 9-year noncancelable lease for equipment having an estimated useful life of 10 years and a fair value to the lessor, Daly Corp. at the inception of the lease of $3,680,000. Cullumber's incremental borrowing rate is 10%. Cullumber uses the straight-line method to depreciate its assets. The lease contains the following provisions: 1. Rental payments of $290,000 are payable at the beginning of each six-month period. 2. An option allowing the lesson to extend the lease one year beyond the lease term. 3. A guarantee by Cullumber Company that Daly Corp, will realize $215,000 from selling the asset at the expiration of the lease. However, the actual residual value is expected to be $141.000 Click here to view factor tables What land of lease is this to Cullumber Company What should be considered the lease term The lease term Trears What is the present value of the late payments (1) for classification of the lease and (2) for menurement of the lease ability? (Round Final answers to decimal places 5.432) 2 What journal entries would Cullumber record during the first year of the lease? (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round present value factor calculations to 5 decimal places, 6.0, 1.25124 and the final answer to decimal places g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record lease) (To record first lease payment) (To record amortization) (Te record interest payment) Click if you would like to Show Work for this question: Ooon Show Work