Kingbird Corporation leases a building to Blossom, Inc. on January 1, 2020. The following facts pertain to the lease agreement.

1.		The lease term is 10 years with equal annual rental payments of $3,863 at the end of each year.
2.		Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature.
3.		The building has a fair value of $35,300, a book value to Kingbird of $23,000, and a useful life of 15 years.
4.		At the end of the lease term, Kingbird and Blossom expect the residual value of the building to be $12,300, and this amount is guaranteed by Money, Inc., a third party.
5.		Kingbird wants to earn a 6% return on the lease, and collectibility of the payments is probable.

KINGBIRD CORPORATION (Lessor) Lease Amortization Schedule Sales-Type Lease Interest on Recovery of Lease Receivable Lease Receivable Annual Lease Payment Lease Receivable Date 1/1/20 $ 35300 12/31/20 3863 12/3121 3863 12/31/22 3863 12/31/23 3863 12/31/24 3863 12/31/25 3863 12/31/26 3863 12/31/27 3863 12/31/28 3863 12/31/29 3863 12/31/30 3863 *Rounded $0 KINGBIRD CORPORATION (Lessor) Lease Amortization Schedule Direct Financing Lease Interest on Recovery of Lease Receivable Lease Receivable Annual Lease Payment Lease Receivable Date 11/20 $ 35300 12/31/20 3863 2118 1745 12/31/21 3863 2013 1850 12/31/22 3863 1902 1961 12/31/23 3863 1784 2079 12/31/24 1660 2203 12/31/25 3863 1527 2336 12/31/26 3863 1387 2476 12/31/27 3863 1239 2624 12/31/28 3863 1081 2782 12/31/29 2949 12/31/29 3126 12300 Prepare the journal entries to record the entries for Kingbird for 2020 and 2021. (Credit account titles are automatically indented when the amous Debit Credit Date 1/1/ 20 Account Titles and Explanation L ease Receivable Cost of Goods Sold Sales Revenue 12/31/20 V 12/31/21 eTextbook and Media List of Accounts - Your answer is partially correct. Prepare the journal entries for Blossom (the lessee) for 2020 and 2021, assuming the rate implicit in the lease is known to Blossom. (Credit accou Account Titles and Explanation Debit Credit Date 1/1/20 12/31/20 12/31/21