Goring Dairy leases its milking equipment from King Finance Company under the following lease terms. 1. 2. 3. The lease term is 10 years, noncancelable, and requires equal rental payments of $30,300 due at the beginning of each year starting January 1, 2020. The equipment has a fair value at the commencement of the lease (January 1, 2020) of $242.741 and a cost of $180,000 on King Finance's books. It also has an estimated economic life of 15 years and an expected residual value of $45,000, though Goring Dairy has guaranteed a residual value of $50,000 to King Finance. The lease contains no renewal options, and the equipment reverts to King Finance upon termination of the lease. The equipment is not of a specialized use. 4. 5. Goring Dairy's incremental borrowing rate is 8% per year. The implicit rate is also 8% Goring Dairy depreciates similar equipment that it owns on a straight-line basis. 6. Collectibility of the payments is probable.. Prepare the journal entries for the lessee and lessor at January 1, 2020, and December 31, 2020 (the lessee's and lessor's year- end). Assume no reversing entries. (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. 1.25125 and final answers to O decimal places, eg. 5,250) Date Account Titles and Explanation Jan. 1, 2020 Lessee: Right-of-Use Asset Jan. 1.2020 Lease Liability (To record the lease.) Lease Liability Debit 242741 Credi 30300 4:18 PM Jan. 1, 2020 Cash (To record lease payment.) Lessor: Lease Receivable. Cost of Goods Sold Sales Revenue Jan. 1,2020 Inventory (To record the lease.) Cash 242741 180000 30000 415 PM 56F Sunny Dec. 31, 2020 Lease Receivable (To record lease payment.) Lessee: Interest Expense 15931 Dec. 31, 2020 Lease Liability (To record interest.) Amortization Expense Right-of-Use Asset- (To record amortization.) Lessor 24002 Dec. 31, 2020 v Lessor: Lease Receivable- eTextbook and Media List of Accounts Save for Later to search Interest Revenue O E ASUS 13305 Attempts: 2 of 4 used Submit Answer 56F Sunny 419 PM 2/90023