Exercise 21-7 On January 1, 2017, Sarasota Company leased equipment to Ivanhoe Corporation. The following information pertains to this lease. 1. The term of the noncancelable lease is 6 years, with no renewal option. The equipment reverts to the lessor at the termination of the lease 2. Equal rental payments are due on January 1 of each year, beginning in 2017 3. The fair value of the equipment on January 1, 2017, is $160,000, and its cost is $128,000. 4. The equipment has an economic life of 8 years, with an unguaranteed residual value of $9,000. Ivanhoe depreciates all of its equipment on a straight-line basis. 5. Sarasota set the annual rental to ensure an 10% rate of return. Ivanhoe's incremental borrowing rate is 11%, and the implicit rate of the lessor is unknown 6. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by the lessor. (Both the lessor and the lessee's accounting period ends on December 31.) calculate the amount of the annual rental payment. e.g. 58,971.) Round present value factor calculations to 5 deci 2512d and the fina answer to Odec ma places al places, e.g The amount of the annual rental payment SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare all the necessary journal entries for Ivanhoe for 2017. (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 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971) Credit Date Account Titles and Explanation Debit (To record the lease.) (To record lease payment.) (To record depreciation.) To record interest.) Prepare all the necessary journal entries for Sarasota for 2017. (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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to o decimal places e.g. 58,971.) Account Titles and Explanation Debit Date Credit To record the lease.) (To record lease payment.) 12/31/17 (To record interest.)