Cullumber Incorporated leases a piece of machinery to Riverbed Company on January 1, 2020, under the following terms. 1. 2 3. The lease is to be for 4 years with rental payments of $11,013 to be made at the beginning of each year. The machinery' has a fair value of $59,170, a book value of $44.160, 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 $22,080. To protect against a large loss, Cullumber requests Riverbed to guarantee $15,310 of the residual value, which Riverbed 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 Riverbed. Collectibility of the payments is probable. 4. 5. 6. Click here to view factor tables. Prepare the journal entries for Riverbed 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, e.g. 1.25124 and the final answer to decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Right-of-Use Asset 41004 Lease Liability 41004 (To record lease) Jan. 1 Lease Liability 11013 Cash 11013 (To records first lease payment) Dec. 31 Interest Expense 1500 Lease Liability 1500 (To record accrued interest) Dec. 31 Amortization Expense 10251 Right-of-Use Asset 10251 Prepare the journal entries for Cullumber 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, e.g. 1.25124 and the final answer to decimal places eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Lease Receivable 59170 Cost of Goods Sold Sales Revenue Inventory 44160 (To record lease) Jan. 1 Cash 11013 Lease Receivable 11013 (To record first lease payment) Dec. 31 Lease Receivable 2408 Interest Revenue 2408 (To record interest revenue)