On January 1, 2017, Cullumber Company leased equipment to Packer Corporation. The following information pertains to this lease.

1.		The term of the noncancelable lease is 5 years. At the end of the lease term, Packer has the option to purchase the equipment for $7,000, while the expected residual value at the end of the lease is $15,000.
2.		Equal rental payments are due on January 1 of each year, beginning in 2017.
3.		The fair value of the equipment on January 1, 2017, is $220,000, and its cost is $168,000.
4.		The equipment has an economic life of 6 years. Packer depreciates all of its equipment on a straight-line basis.
5.		Cullumber set the annual rental to ensure a 6% rate of return. Packers incremental borrowing rate is 7%, and the implicit rate of the lessor is unknown.
6.		Collectibility of lease payments by the lessor is probable.

Both the lessor and the lessees accounting periods end on December 31.

Prepare all the necessary journal entries for Packer for 2017. (Credit account titles are automat Date Account Titles and Explanation Debit Credit 1/1/17 TRight-of-Use Asset Lease Liability (To record the lease) Lease Liability 48099 Cash 48099 (To record the receipt of lease payment) 12/31/17 Amortization Expense Right-of-Use Asset (To record amortization of the right-of-use asset) Interest Expense Lease Liability (To record interest expense) Click if you would like to Show Work for this question: Open Show Work