Crane Incorporated leases a piece of machinery to Pronghorn Company on January 1, 2020, under the following terms. 1. 2. 3. The lease is to be for 4 years with rental payments of $11,793 to be made at the beginning of each year, The machinery has a fair value of $63,358, a book value of $47,280, and an economic life of 10 years, At the end of the lease term, both parties expect the machinery to have a residual value of $23,640. To protect against a large loss, Crane requests Pronghorn to guarantee $16,480 of the residual value, which Pronghorn agrees to do. 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. The implicit rate is 5%, which is known by Pronghorn, Collectibility of the payments is probable. 4 5. 6. Suppose Pronghorn did not guarantee any amount of the expected residual value. Prepare the journal entries for Pronghorn 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 for the amounts. Round present value factor calculations to 5 decimal places, es. 1.25124 and the final answer to decimal places eg. 5,275.) Debit Credit Date Account Titles and Explanation Jan. 1 (To record lease) jan. 1 (To record first lease payment) Dec. 31 (To record interest and amortization)