Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January $1,2019.$ The lease terms, provisions, and related events are as follows:

The lease term is $5$ years. The lease is noncancelable and requires annual rental receipts of $$100,000$ to be made in advance at the beginning

of each year.

The equipment costs $$313,000.$ The equipment has an estimated life of $6$ years and, at the end of the lease term, has an unguaranteed

residual value of $$20,000$ accruing to the benefit of Edom.

Davis agrees to pay all executory costs directly to a third party.

The interest rate implicit in the lease is $14\%.$

The initial direct costs are insignificant and assumed to be zero.

It is probable that Edom will collect the lease payments.

Required:

Next Level Assuming that the lease is a sales$-$type lease from Edom's point of view, calculate the selling price.

Prepare a table summarizing the lease receipts and interest income earned by Edom.

Prepare a table showing the accretion of the unguaranteed residual asset.

Prepare journal entries for Edom, the lessor, for the years $2019$ and $2020.$