Carla Vista Company leases a building to Sunland, Inc. on January $1,2025.$ The following facts pertain to the lease agreement.

The lease term is $5$ years, with equal annual rental payments of $$3,511$ at the beginning of each year.

Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature.

The building has a fair value of $$17,200,$ a book value to Carla Vista of $$10,200,$ and a useful life of $6$ years.

At the end of the lease term, Carla Vista and Sunland expect there to be an unguaranteed residual value of $$3,560.$

Carla Vista wants to earn a return of $9\%$ on the lease, and collectibility of the payments is probable. This rate is known by Sunland.

Click here to view factor tables.

$($b$)$ Using the original facts of the lease, show the journal entries to be made by both Carla Vista and Sunland in $2025.($List all debit entries before credit entries. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answers to $0$ decimal places, e$.$g$.5,275.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually.$)$

Carla Vista's Journal Entries

Date $,$ Account Titles and Explanation

$($To record the lease$)$

$$

$$

$$

$$

$$

$$

$($To record lease payment$)$

$$

$$

$$

$$

Sunland's Journal Entries

$($To record amortization of the right$-$of$-$use asset$)$