Exercise 21A-16 Your answer is partially correct. Try again Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Swifty Company. The following information relates to this agreement. 1. 2. 3. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years The fair value of the asset at January 1, 2017, is $65,000 The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is quaranteed 4. The agreement requires equal annual rental payments of $20,366 to the lessor, beginning on January 1, 2017 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee 6. Swifty uses the straight-line depreciation method for all equipment. Assume that the expected residual value at the end of the lease is $8,000, such that the payments are $20,058 iew Prepare all of the journal entries for the lessee for 2017 to record the lease agreement, the lease payments, and all expenses related to this lease Assume the lessee's annual accounting period ends on December 31. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answers to 0 decimal places, e.g. 5,265. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 58778 58778 Lease Liability (To record the lease) 20366 Lease Liability 20366 Cash To record lease liability) 12/31/17 Accumulated Depreciation-Equipment 18830 Lease Liability Accumulated Depreciation-Equipment Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Question Attempts: 3 of 15 used