Exercise 21A-9 a-b (Part Level Submission) Ivanhoe Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2017. The lease is for an 8-year period and requires equal annual payments of $31,300 at the beginning of each year. The first payment is received on January 1, 2017. Ivanhoe had purchased the machine during 2016 for $170,000. Collectibility of lease payments by Ivanhoe is probable lanhoe set the annual rental to ensure a 7% rate of re r . The machine a an economic life of 10 years with no residual value and reverts to Ivanhoe at the termination of the lease. Assume that Dexter Corporation does not know the rate implicit in the lease used by Ivanhoe, and Dexter's incremental borrowing rate is 9%. In addition, assume that Dexter incurs initial direct costs of$13,000. Click here to view the factor table Your answer is correct. Compute the amount of the lease liability and right-of-use asset for Dexter. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Lease liability Right-of-use asset 188831 201831 (b) Prepare all necessary journal entries for Dexter for 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to o decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/17 Lease Receivable (To record the lease) (To record the first lease payment) 12/31/17 (To record interest expense) (To record amortization of the right-of-use asset)