I just need help with part C

Blue Corporation leased equipment to Larkspur, Inc. on January $1,2025.$ The lease agreement called for annual rental payments of

$$1,000$ at the beginning of each year of the $4-$year lease. The equipment has an economic useful life of $8$ years, a fair value of $$9,400,$ a

book value of $$7,400,$ and Blue expects a residual value of $$6,900$ at the end of the lease term. Blue set the lease payments with the

intent of earning a $5\%$ return, though Larkspur is unaware of the rate implicit in the lease and has an incremental borrowing rate of

$7\%.$ There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a

specialized nature.

Click here to view factor tables.

$($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

$(a)$

Your answer is correct.

What is the amount of the rental payments used in the lease agreement? $($Round answer to O decimal places, e$.$g$.5,275.)$

Rental payments $ Correct Answer $($Used$)$

Prepare the entries for Blue for $2025.($List all debit entries before credit entries. Credit account titles are automatically indented when

the amount is entered. Do not indent manually. Round answers to $0$ decimal places, e$.$g$.5,275.$ Record journal entries in the order presented

in the problem. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Date

Account Titles and Explanation

Debit

Credit

Cash

Unearned Lease Revenue

Unearned Lease Revenue

Lease Revenue

$($To record the recognition of the revenue$)$

Depreciation Expense

Accumulated Depreciation$-$Equipment

$($To record depreciation expense on the leased

equipment$)$ Your answer is partially correct.

Prepare entries for Blue if it incurred legal fees of $$700$ to execute the lease documents and $$500$ in advertising expenses for the

year in connection with the lease. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually.

Round answers to $0$ decimal places, e$.$g$.5,275.$ If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.

Record journal entries in the order presented in the problem.$)$

Date

$\frac{1}{1}\frac{?}{25}$

Over the

course of

the year

$\frac{12}{31}\frac{?}{25}$

$\frac{12}{31}\frac{?}{25}$

$$

Debit

Credit

Credit

$$