Kingbird Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $55,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Kingbird's incremental borrowing rate is 8%. Kingbird is unaware of the rate being used by the lessor. At the end of the lease, Kingbird has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Kingbird uses the straight-line method of depreciation on similar owned equipment. Click here to view factor tables. (a) Your answer is partially correct. Prepare the journal entries, that Kingbird should record on December 31, 2020. (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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 58,971.) Date Account Titles and Explanation December Right-of-Use Asset 31,2020 Lease Liability (To record leased asset and related liability.) Lease Liability Cash (To record the first rental payment.) eTextbook and Media List of Accounts Save for Later Debit 236555 55000 Credit 236555 55000 Attempts: 2 of 5 used Submit Answer Date Account Titles and Explanation Debit Credit December 31, 2021 (To record amortization.) (To record annual payment on lease liability.) eTextbook and Media List of Accounts Save for Later Attempts: 0 of 5 used Submit Answer Prepare the journal entries, that Kingbird should record on December 31, 2022. (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 O for the amounts. Round answers to O decimal places e.g. 58,971.) Date Account Titles and Explanation December 31, 2022 (To record annual amortization on leased assets.) To record annual payment on lease lisbility) Debit Credit What amounts would appear on Kingbird's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to O decimal places, e.g. 58,971.) eTextbook and Media List of Accounts Save for Later KINGBIRD STEEL COMPANY Balance Sheet Assets Liabilities LA 69 Attempts: 0 of 5 used Submit