On January $1,2025,$ Sunland Company leased equipment to Carla Vista Corporation. The following information pertains to this lease.

The term of the non$-$cancelable lease is $6$ years. At the end of the lease term, Carla Vista has the option to purchase the

equipment for $$2,000,$ while the expected residual value at the end of the lease is $$6,000.$

Equal rental payments are due on January $1$ of each year, beginning in $2025.$

The fair value of the equipment on January $1,2025.$ is $$200,000.$ and its cost is $$150,000.$

The equipment has an economic life of $8$ years. Carla Vista depreciates all of its equipment on a straight$-$line basis.

Sunland set the annual rental to ensure a $4\%$ rate of return. Carla Vista's incremental borrowing rate is $5\%,$ and the implicit

rate of the lessor is unknown.

Collectibility of lease payments by the lessor is probable.

Both the lessor and the lessee's accounting periods end on December $31.$

Computation of annual rental payment $($by the lessor$)$:

Fair value of leased asset

Less: Present value of bargain$-$purchase option $($ $$2,0000\mathrm{.}79031\%$

PV of lease payments

Six annual lease payments: $$198,419{5\mathrm{.}45182}^{****}$

$$36,395$

$-$Present value of $$1$ at $4\%$ for $6$ periods.

"Present value of an annuity due at $4\%$ for $6$ periods.

Prepare all the necessary journal entries for Carla Vista for $2025.($List all debit entries before credit entries. Credit account titles are

automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account tifles

and enter $0$ for the amounts. Round answers to $0$ decimal places, eg$.5,275.$ Record journal entrles in the order presented in the problem.$)$

Date

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

Account Titles and Explanation

Right$-$of$-$Use Auset

$($To record the lease$)$

Debit

Credit

$($To record the lease payment$)$

$]$

$($To record amortization of the right$-$of$-$use asset$)$

Please note that the question is asking about Carla Vista's journal entries and not Sunlands.