Ivanhoe Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $86,500. Under the 3-year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2020. Ivanhoe expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. Your answer is correct. Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 5,275.) it Receipt/Payment $ Interest Revenue/Expense Reduction of Principal 0 $ Receivable/Liability i $ 86500 33566.16 33566.16 6920 4788.31 26646.161 28777.85 33566.16 2486.08 31080.08 59854 31075.99 Your answer is partially correct. Prepare the journal entry at commencement of the lease for Ivanhoe. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation 1/1/20 Lease Receivable Cost of Goods Sold Sales Revenue Inventory eTextbook and Media List of Accounts Debit 86500 65000 Credit 86500 65000 Your answer is correct. Prepare the journal entry at commencement of the lease for Sharrer. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation 1/1/20 Right-of-Use Asset Lease Liability eTextbook and Media List of Accounts Debit 86500 Credit 86500 Your answer is partially correct. Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Ivanhoe's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial directs costs of $10,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places eg. 5,275.) Date Account Titles and Explanation 1/1/20 Right-of-Use Asset Lease Liability Debit Credit 95463 84965 Cash eTextbook and Media List of Accounts 10500