Exercise 21A-13 b Your answer is partially correct. Try again Cullumber Company leases a building to Walsh, Inc. on January 1, 2017. The following facts pertain to the lease agreement. 1. 2. 3. 4. 5. The lease term is 6 years, with equal annual rental payments of $3,938 at the beginning of each year Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature The building has a fair value of $22,700, a book value to Cullumber of $15,700, and a useful life of 7 years At the end of the lease term, Cullumber and Walsh expect there to be an unguaranteed residual value of $3,925 Cullumber wants to earn a return of 7% on the lease, and collectibility of the payments is probable. This rate is known by Walsh ick he view Using the original facts of the lease, show the journal entries to be made by both Cullumber and Walsh in 2017. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) ullumber Journal Entries Date 1/1/17 Lease Receivable Account Titles and Explanation Debit Credit 22700 Cost of Goods Sold 13085 Sales Revenue 20085 Inventory (To record the lease) Cash 15700 3938 Lease Receivable 3938 (To record lease payment) (To record lease payment) 12/31/17Lease Receivable 1313 Interest Revenue 1313 Walsh's Journal Entries Date Account Titles and Explanation Debit Credit 1/1/17 Right-of-Use Asset 20085 20085 Lease Liability (To record the lease) Lease Liability 3938 Cash 3938 To record lease liability) 12/31/17 Interest Expense 1130 Lease Liability 1130 (To record interest expense) Right-of-Use Asset (To record amortization of the right-of-use asset) Click if you would like to Show Work for this question: Open Show Work