Current Attempt in Progress Larkspur Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Crane Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. Crane has the option to purchase the equipment for $ 26,500 upon termination of the lease. It is not reasonably certain that Crane will exercise this option. The equipment has a cost of $ 330,000 and fair value of $ 368,000 to Larkspur Leasing. The useful economic life is 2 years, with a residual value of $ 26,500. Larkspur Leasing desires to earn a return of 5% on its investment. Collectibility of the payments by Larkspur Leasing is probable. 3. 4. Click here to view factor tables. (a) Your answer is partially correct. Prepare the journal entries on the books of Larkspur Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to decimal places eg. 5,275.) Account Titles and Explanation Debit Credit v Lease Receivable 368,000 Cost of Goods Sold 305.963 Sales Revenue 343,963 Inventory 330.000 O MAANAA Cash 3311,985 Interest Revenue 184.000 Lease Receivable MANTAN 127.985 Cash 3311,985 Interest Revenue 12000 Lease Receivable 299.984