i need help on part b

Question 18 of 18 T! View Policies Show Attempt History Current Attempt in Progress Crane Incorporated leases a piece of machinery to Blue Company on January 1, 2020, under the following terms. 1. 2 3. The lease is to be for 4 years with rental payments of $10,236 to be made at the beginning of each year, The machinery has a fair value of $54,994, a book value of $41.040, and an economic life of 10 years. At the end of the lease term, both parties expect the machinery to have a residual value of $20,520. To protect against a large loss, Crane requests Blue to guarantee $14,140 of the residual value, which Blue agrees to do. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature The implicit rate is 5%, which is known by Blue. Collectibility of the payments is probable. 4. 5. 6. Click here to view factor tables. ) (a) Your answer is correct. Evaluate the criteria for classification of the lease, and describe the nature of the lease. For the lessee, it is a hace lease ..and for the lessor, it is a sales type lease : e Textbook and Media aler 21 Homework Assignment Question 18 of 18 0.29/1 Your answer is partially correct. Prepare the journal entries for Blue for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Round present value factor calculations to 5 decimal places, s. 1.25124 and the final answer to decimal places es. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Right of Use 54995 neby (To record lease) Jan. 1 Le Laby 10236 10256 (To records first lease payment) | 101 TIRDET Dec. 31 tot Expert Leaseh (To record accrued interest) Dec. 31 Whartlotion Laborat