Carla Vista Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $89,000. Under the 3-year, non- cancelable contract, Sharrer 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, 2020. Carla Vista expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. 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 answers to 0 decimal places e.g. 5,275.) Date Rent Receipt/ Payment Interest Revenue/ Expense Reduction of Principal Receivable/ Liability 1/1/20 $ 89,000 $ 12/31/20 34,535 7,120 27,415 61,585 12/31/21 34,535 4,927 29,608 31,977 12/31/22 34,535 2,558 31,977 0 Prepare the journal entry at commencement of the lease for Carla Vista. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit x 1/1/20 Right-of-Use Asset 105,480 X Lease Liability 105,480 X X Lease Liability 10,000 X Cash 10,000 Prepare the journal entry at commencement of the lease for Sharrer. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20 TRight-of-Use Asset 103,605 Lease Liability 103,605 Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Carla Vista's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial directs costs of $10,000. (Credit account titles are automatically indented when 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. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/20 Lease Receivable 103,605 X X Right-of-Use Asset 89,000 Unearned Lease Revenu 14,605 Carla Vista Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $89,000. Under the 3-year, non- cancelable contract, Sharrer 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, 2020. Carla Vista expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. 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 answers to 0 decimal places e.g. 5,275.) Date Rent Receipt/ Payment Interest Revenue/ Expense Reduction of Principal Receivable/ Liability 1/1/20 $ 89,000 $ 12/31/20 34,535 7,120 27,415 61,585 12/31/21 34,535 4,927 29,608 31,977 12/31/22 34,535 2,558 31,977 0 Prepare the journal entry at commencement of the lease for Carla Vista. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit x 1/1/20 Right-of-Use Asset 105,480 X Lease Liability 105,480 X X Lease Liability 10,000 X Cash 10,000 Prepare the journal entry at commencement of the lease for Sharrer. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20 TRight-of-Use Asset 103,605 Lease Liability 103,605 Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Carla Vista's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial directs costs of $10,000. (Credit account titles are automatically indented when 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. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/20 Lease Receivable 103,605 X X Right-of-Use Asset 89,000 Unearned Lease Revenu 14,605