Current Attempt in Progress 1. 2 Goring Dairy leases its milking equipment from King Finance Company under the following lease terms The lease term is 10 years, noncancelable, and requires equal rental payments of $30,300 due at the beginning of each year starting January 1, 2020 The equipment has a fair value at the commencement of the lease (January 1, 2020) of $242,741 and a cost of $180,000 on King Finance's books. It also has an estimated economic life of 15 years and an expected residual value of $45,000, though Goring Dairy has guaranteed a residual value of $50,000 to King Finance. 3. The lease contains no renewal options, and the equipment reverts to King Finance upon termination of the lease. The equipment is not of a specialized use. Goring Dairy's incremental borrowing rate is 8% per year. The implicit rate is also 8%. Goring Dairy depreciates similar equipment that it owns on a straight-line basis. Collectibility of the payments is probable. 4. 5. 6. Click here to view factor tables. (b) Prepare the journal entries for the lessee and lessor at January 1, 2020, and December 31, 2020 (the lessee's and lessor's year ench). Assume no reversing entries. (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, eg. 1.25125 and final answers to decimal places, eg. 5,250.) Date Debit Cret Account Titles and Explanation Lessee 221146 Jan 1, 2020 Lease Expense Lease Liability (To record the lease.) 30.300 Jan. 1. 2020 Lease Liability Cash (To record lease payment.) Lessor: 221146 Jan. 1. 2020 Lease Receivable Equipment 30.300 Cash Lessen Dec 31, 2020 interest Expense Interest Payabile (to record interest Dec 312020 Dection Acco (To record amortization) Lesson Dec 31, 2020 Interest ceable Intest Run eTextbook and Media List of Accounts Submit Aruwer Attempts of 4 used