Kingbird Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Oriole Medical Center for a period of 10 years. The normal selling price of the machine is $523,245, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $15,000. The hospital will pay rents of $63,400 at the beginning of each year. Kingbird incurred costs of $258,000 in manufacturing the machine and $14,900 in legal fees directly related to the signing of the lease. Kingbird has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Oriole Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000. ORIOLE MEDICAL (Lessee) Lease Amortization Schedule (Annuity Due Basis, GRV) Interest on Reduction of Lease Unpaid Liability Liability Annual Lease Payment Plus GRV Lease Liability $ i $ $ 517106 63400 i 63400 453706 63400 22685 40715 412991 63400 20649 42751 370240 63400 18512 44888 325352 63400 16268 47132 278220 63400 13911 49489 228731 63400 11437 51963 176768 63400 8838 54562 122206 63400 61105 57290 64916 63400 3246 60154 4762 5000 238 4762 A A tA 639000 121889 517106 Prepare all of the lessee's journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. Round answers to o decimal places e.g. 5,275.) Account Titles and Explanation Debit Credit (To record the lease of x-ray equipment using finance lease method.) (To record payment of annual lease obligation.) (To record accrual of annual interest on lease obligation.) (To record amortization expense for year 1 using straight-line method.)