On January 1, 2017, Skysong Co leased a building to Sheridan Corp The relevant information related to the lease is as follows 1 The lease arrangement is for 5 years The building is expected to have a residual value at the end of the lease of $1,740,000 (unguaranteed) 2 The leased building has a cost of $1,860,000 and was purchased for cash on January 1, 2017 3 The building is depreciated on a straight line basis Its estimated economic life is 30 years with no salvage value 4 Lease payments are $280,000 per year and are made at the beginning of the year 5 Sheridan has an incremental borrowing rate of 7 , and the rate implicit in the lease is unknown to Sheridan 6 Both Skysong and Sheridan are on a calendar year basis Prepare the journal entries that Skysong Co should make in 2017 (Credit account titles are automatically indented Date Account Titles and Explanation Debit Credit To record cost of the building) To record receipt of lease payment) 12 31 17 To record the recognition of the revenue each period) To record depreciation expense on the leased asset)

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On January 1, 2017, Skysong Co. leased a building to Sheridan Corp. The relevant information related to the lease is as follows. 1. The lease

On January 1, 2017, Skysong Co. leased a building to Sheridan Corp. The relevant information related to the lease is as follows.

1.		The lease arrangement is for 5 years. The building is expected to have a residual value at the end of the lease of $1,740,000 (unguaranteed).
2.		The leased building has a cost of $1,860,000 and was purchased for cash on January 1, 2017.
3.		The building is depreciated on a straight-line basis. Its estimated economic life is 30 years with no salvage value.
4.		Lease payments are $280,000 per year and are made at the beginning of the year.
5.		Sheridan has an incremental borrowing rate of 7%, and the rate implicit in the lease is unknown to Sheridan.
6.		Both Skysong and Sheridan are on a calendar-year basis.

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Prepare the journal entries that Skysong Co. should make in 2017. (Credit account titles are automatically indented Date Account Titles and Explanation Debit Credit To record cost of the building) To record receipt of lease payment) 12/31/17 To record the recognition of the revenue each period) To record depreciation expense on the leased asset)