CullumberCorporation, which uses ASPE, manufactures replicators. On May 29, 2020, it leased toCraneLimited a replicator that cost $265,600to manufacture and usually sells for $417,000. The lease agreement covers the replicator's9-year useful life and requires9equal annual rentals of $66,982each, beginning May 29, 2020. The equipment reverts toCullumberat the end of the lease, at which time it is expected that the replicator will have a residual value of $47,900, which has been guaranteed byCrane, the lessee. An interest rate of12% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs

PrepareCullumber's May 29, 2020 journal 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 0 for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

May 29

(To record inception of lease.)

May 29

(To record cost of goods sold.)

May 29

(Collection of first lease payment.)