Cullumber, Inc. leases a piece of equipment to Crane Company on January $1,2025.$ The contract stipulates a lease term of $5$

years, with equal annual rental payments of $$8,928$ at the end of each year. 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. The asset has a fair value of $$48,000,$ a

book value of $$43,000,$ and a useful life of $8$ years. At the end of the lease term, Cullumber expects the residual value of the

asset to be $$12,000,$ and this amount is guaranteed by a third party.

Assuming Cullumber wants to earn a $5\%$ return on the lease and collectibility of the lease payments is probable, record its

journal entry at the commencement of the lease on January $1,2025.($List all debit entries before credit entries. 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. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round

final answers to $0$ decimal places, e$.$g$.5,275.)$

Click here to view factor tables.

Account Titles and Explanation

Lease Receivable

Leased Asset

Unearned Lease Revenue

Debit

Credit