E21-4 (LO2.4) EXCEL (Lessee Enties in 2016, Kimberly-Clark Corp. signs n 10-year, non SDXCEL (Lessee Entries Finance Lease and Unguraniced Residual Value Assume that Company. The following information purtains this case wgreeme Shark Corp. signs a 10-year no cancelables surement to leasen stare building from the 1. The agree he agreement requires equal rental m isol 571.830 beginning on December 31, 2016 2. The fair value of the building on December 31, 2016. Is 5515.176. 3. The building has an estimated economic life of 12 year ins has an estimated economic life of 12 years, a garanteed residual value of $10,000, and an expected residual value of $7.000. Kimberly-Clark d eclates sunilar buildings on the straight-line method. The lease is nonrenewable. At the termination of the lease, the building reverts to the less not own by Kimberly Car berly-Clark's incremental borrowing role is B's our year. Thessor's implicitate Instructions Prepare the journal entries on the less's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2016, 2017, and 2018. Kimberly-Clark's fiscal year end is December 31 Suppose the same facts as above. Spet that Kimberly-Clark incurred legal fees resulting from the execution of the lease of S5,000, and received a les incentive from Sheffield to enter the age of $1.000. How would the initiala ment of the lease liability and right-of-use not be affected under this situation? tel Suppose that in addition to the 571,830 annual rental payments, Kimberly-Clark is also required to pay 55,000 for insur- ance costs each year on the building directly to the lessor Sheffield Storage. How would this executory cost afect the initial measurement of the lease liability and right-of-use asset? (d) Return to the original facts in the problem. Now suppose that, at the end of the leasc term, Kimberly-Clark look good (a) Pred (b) Suppy care of the asset and Sheffield agrecs that the fair value of the asset is a lly $10.000. Record the entry for Kimberle Clark at the end of the lease to return control of the storage building to Sheffield (assuming the actual of interest on the lease liability has already been made)