CullumberInc. leased a new crane to Bramble Construction under a 5-year, non-cancelable contract starting January 1, 2020. Terms of the lease require payments of $45,000 each January 1, starting January 1, 2020. The crane has an estimated life of 7 years, a fair value of $220,000, and a cost to Cullumber of $220,000. The estimated fair value of the crane is expected to be $40,000 (unguaranteed) at the end of the lease term. No bargain purchase or renewal options are included in the contract, and it is not a specialized asset. Both Cullumber and Bramble adjust and close books annually at December 31. Collectibility of the lease payments is probable. Brambles incremental borrowing rate is 8%, and Cullumbers implicit interest rate of 8% is known to Bramble.

Prepare all the entries related to the lease contract and leased asset for the year 2020 for the lessee and lessor, assuming Bramble uses straight-line amortization for all similar leased assets, and Cullumber depreciates the asset on a straight-line basis with a salvage value of $15,000. (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 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25125 and the final answer to decimal places eg. 58,972.) Date Debit Credit Account Titles and Explanation Lessee's Entries 1/1/20 45,000 (To record lease.) 1/1/20 (To record lease payment.) 12/31/20 (To record interest and amortization expense.) Lessor's Entries 1/1/20 (To record the receipt of payment.) 12/31/20 (To record depreciation.) 12/31/20 (To record lease revenue.)