Crane Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement.

1.		The lease term is 4 years, with equal annual rental payments of $4,056 at the beginning of each year.
2.		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.
3.		The building has a fair value of $16,200, a book value to Crane of $9,200, and a useful life of 5 years.
4.		At the end of the lease term, Crane and Walsh expect there to be an unguaranteed residual value of $2,300.
5.		Crane wants to earn a return of 8% on the lease, and collectibility of the payments is probable. This rate is known by Walsh

(b) Using the original facts of the lease, show the journal entries to be made by both Crane and Walsh in 2020. (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.)

ONLY NEED DEBITS AND CREDITS FILLED IN. THANK YOU! Crane Journal Entries

Date	Account Titles and Explanation	Debit	Credit
1/1/20	lease receivable
	COGS
	sales rev
	inventory
	(To record the lease)
1/1/20	Cash
	Lease receivable
	(To record lease payment)
12/31/20	Lease Receivable
	interest revenue

Walshs Journal Entries

Date	Account Titles and Explanation	Debit	Credit
1/1/20	right of use asset
	lease liability
	(To record the lease)
1/1/20	lease liability
	cash
	(To record lease payment)
12/31/20	interest expense
	lease liability
	(To record interest expense)
12/31/20	amort expense
	right of use
	(To record amortization of the right-of-use asset)