Crane Incorporated leases a piece of machinery to Blue Company on January 1, 2020, under the following terms. 1. The lease is to be for 4 years with rental payments of $15,942 to be made at the beginning of each year. 2. The machinery' has a fair value of $85,650, a book value of $63,920, and an economic life of 10 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $31,960. To protect against a large loss, Crane requests Blue to guarantee $22,720 of the residual value, which Blue agrees to do. 4. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. 5. The implicit rate is 5%, which is known by Blue. 6. Collectibility of the payments is probable. Prepare the journal entries for Crane for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Lease Receivable 85,650 Cost of Goods Sold 63,920 Sales Revenue 85,650 Inventory 63,920 (To record lease)