COMPLETE PART D

Pharoah Leasing Company leases a new machine to Sharrer Corparation. The machina has a cost of $65,000 and fair value of $87,500. Under the 3-year, non-zancelable contract, Sharrer will receive title to the machine at the and of the lese. The machine has a 3 -yas usaful life and no residual valua. The lasa was signed on January 1, 2020 . Pharoah expects to aarn an 84 raturn on its investrment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, bexinning December 31,2020. Prepare the journal entry at commencement of the lease for Pharoah. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) 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.) eTextbook and Media List of Accounts Attempts: 0 of 3 used