Carla Vista Leasing Company leases a new machine to Sandhill Corporation. The machine has a cost of $$65,000$ and fair value of $$89,000.$ Under the $3-$year, non$-$cancelable contract, Sandhill will receive title to the machine at the end of the lease. The machine has a $3-$year useful life and no residual value. The lease was signed on January $1,2025.$ Carla Vista expects to earn an $8\%$ return on its investment, and this implicit rate is known by Sandhill. The annual rentals are payable on each December $31,$ beginning December $31,2025.$

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$($b$)$

Your answer is correct.

Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. $($For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final ansiwers to $0$ decimal places eg$.5,275,$

Date

Rent Receipt$/$ Payment

Interest $(8\%)$ Revenue$/$

Expense

Reduction of Principal

Receivat

$\frac{1}{1}\frac{?}{25}$

$

$

$40$

$\frac{12}{31}\frac{?}{25}$

$34535$

$$

$\frac{12}{31}\frac{?}{26}$

When $4927$

$\frac{12}{31}\frac{?}{27}$

$31977$

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List of Accounts

Attempts; $2$ of $3$ used

$($c$)$

Prepare the journal entry at commencement of the lease for Carla Vista. $($Q$/$st all debilt entries before credit entries, Credit account titles are outomatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.

Date

Account Titles and Explanation

Debit

Credit

$\frac{1}{1}\frac{?}{25}$