Exercise 21-20 Riverbed Corporation leased equipment to Marin, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,501 at the beginning of each year of the 2-year lease. The equipment has an economic useful life of 6 years, a fair value of $8,400, a book value of $6,400, and Riverbed expects a residual value of $5,900 at the end of the lease term. Riverbed set the lease payments with the intent of earning a 4% return, though Marin is unaware of the rate implicit in the lease and has an incremental borrowing rate of 6%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) * Your answer is incorrect. Try again. What is the amount of the rental payments used in the lease agreement? (Round answer to 0 decimal places, e.g. 5,275.) Rental payments SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare the entries for Riverbed for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 TRight-of-Use Asset x Lease Liability 1/1/20 Lease Liability Cash (To record the recognition of the revenue) x (To record depreciation expense on the leased equipment) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. How would Riverbed's accounting in part a change if it incurred legal fees of $800 to execute the lease documents and $600 in advertising expenses for the year in connection with the lease? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 X x X x x x Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT