Macinski Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $$70,000$ and fair value of $$95,000.$ 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 $1,2025.$ Macinski 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 $31,2025.$

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$($b$).$

$($c$)$

$($d$)$

Your answer is partially correct.

Prepare the journal entry at commencement of the lease for Sharrer. $($List debit entry before credit entry. 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 $0$ for the amounts.$)$

Date Account Titles and Explanation

Debit

Credit

$\frac{1}{1}\frac{?}{25}$

Right$-$of$-$Use Asset