CraneSteel Company, as lessee, signed a lease agreement for equipment for5years, beginning December 31, 2020. Annual rental payments of $43,000are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is7%;Crane's incremental borrowing rate is9%.Craneis unaware of the rate being used by the lessor. At the end of the lease,Cranehas the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of7years, with no salvage value.Craneuses the straight-line method of depreciation on similar owned equipment.

Prepare the journal entries, that Crane should record on December 31, 2020. (Credit account titles are automatically indented when 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 answers to O decimal places, e.g. 58,971.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record leased asset and related liability.) (To record the first rental payment.)Prepare the journal entries, that Crane should record on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account TItles and Explanation Debit Credit December 31,2021 (To record amortization.) (To record annual payment on lease liability.) Prepare the journal entries, that Crane should record on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e3. 58,971.) Date Account Titles and Explanation Debit Credit December 31,2022 (To record annual amortization on leased assets.) (To record annual payment on lease liability.) What amounts would appear on Crane's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to 0 decimal places, e.g. 58,971.) CRANE STEEL COMPANY Balance Sheet 1' Liabilities A v 1