Cullumber Company, a machinery dealer, leased a machine to Ivanhoe Corporation on January $1,2025.$ The lease is for an $8-$year period and requires equal annual payments of $$28,300$ at the beginning of each year. The first payment is received on January $1,2025.$ Cullumber had purchased the machine during $2024$ for $$160,000.$ Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a $5\%$ rate of return. The machine has an economic life of $10$ years with no residual value and reverts to Cullumber at the termination of the lease. Assume that I vanhoe Corporation does not know the rate implicit in the lease used by Cullumber, and Ivanhoe's incremental borrowing rate is $7\%.$ In addition, assume that Ivanhoe incurs initial direct costs of $$12,000.$

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$($a$)$

Your answer is correct.

Compute the amount of the lease liability and right$-$of$-$use asset for I vanhoe. $($For calculation purposes, use $5$ decimal places as displayed in the factor toble provided and round final answers to $0$ decimal ploces eq$.5,275.)$

Lease liability

Right$-$of$-$use asset

$

$$

$ $$

$192817$

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$($b$)$

Your answer is partially correct.

Prepare all necessary journal entries for Ivanhoe for $2025.($List all debit entries before credit entries. Credit acocunt tities are: automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Enty" for the crocount tibles, and enter O for the amounts. Round answers to $0$ decimal places es$.5,275.$ Record journal entries in the order presented in bhe proiblem.$).$

$($To record the first lease payment$)$

$12/31/25$

$($To record amortization of the right$-$of$-$use asset$)$