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Kate Co. leased a warehouse from Big Dave Industries on July 1, 2018, in a finance lease. The present value of the lease payments discounted

Kate Co. leased a warehouse from Big Dave Industries on July 1, 2018, in a finance lease. The present value of the lease payments discounted at 10% was $160,000. Ten annual lease payments of $24,000 are due each July1, beginning July 1, 2018. Big Dave had constructed the equipment recently for $132,000 and its retail fair value was $160,000. Required: Assuming that control of the warehouse is transferred to KateCo at the beginning of the lease. Prepare the two journal entries to record the lease by Big Dave at July 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.)

Journal Entries:

1. Record the lease payment.

2. Record cash received.

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