On January 1, 2017, Stellar Company leased equipment to Pearl Corporation. The following information pertains to this lease. 1. The term of the noncancelable lease is 6 years, with no renewal option. The equipment reverts to the lessor at the termination of the lease. 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 $124,000, and its cost is $99,200. 4. The equipment has an economic life of 8 years, with an unguaranteed residual value of $8,000. Pearl depreciates all of its equipment on a straight-line basis. 5. Stellar set the annual rental to ensure an 12% rate of return. Pearls incremental borrowing rate is 13%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by the lessor. (Both the lessor and the lessees accounting period ends on December 31.) Click here to view factor tables Correct answer. Your answer is correct. Calculate the amount of the annual rental payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) The amount of the annual rental payment $enter the amount of the annual rental payment rounded to 0 decimal placesEntry field with correct answer 26048 SHOW LIST OF ACCOUNTS LINK TO TEXT Partially correct answer. Your answer is partially correct. Try again. Prepare all the necessary journal entries for Pearl for 2017. (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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit choose a transaction dateEntry field with correct answer enter an account title to record the leaseEntry field with correct answer Leased Equipment enter a debit amountEntry field with incorrect answer 122319 enter a credit amountEntry field with correct answer enter an account title to record the leaseEntry field with correct answer Lease Liability enter a debit amountEntry field with correct answer enter a credit amountEntry field with incorrect answer 122319 (To record the lease.) enter an account title to record lease paymentEntry field with correct answer Lease Liability enter a debit amountEntry field with correct answer 26048 enter a credit amountEntry field with correct answer enter an account title to record lease paymentEntry field with correct answer Cash enter a debit amountEntry field with correct answer enter a credit amountEntry field with correct answer 26048 (To record lease payment.) choose a transaction dateEntry field with correct answer enter an account title to record depreciationEntry field with correct answer Depreciation Expense enter a debit amountEntry field with incorrect answer 20387 enter a credit amountEntry field with correct answer enter an account title to record depreciationEntry field with incorrect answer Accumulated DepreciationEquipment enter a debit amountEntry field with correct answer enter a credit amountEntry field with incorrect answer 20387 (To record depreciation.) enter an account title to record interestEntry field with correct answer Interest Expense enter a debit amountEntry field with incorrect answer 12515 enter a credit amountEntry field with correct answer enter an account title to record interestEntry field with correct answer Interest Payable enter a debit amountEntry field with correct answer enter a credit amountEntry field with incorrect answer 12515 (To record interest.) Partially correct answer. Your answer is partially correct. Try again. Prepare all the necessary journal entries for Stellar for 2017. (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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit 1/1/17 enter an account title to record the lease on January 1, 2017Entry field with correct answer Lease Receivable enter a debit amountEntry field with correct answer 124000 enter a credit amountEntry field with correct answer enter an account title to record the lease on January 1, 2017Entry field with correct answer Cost of Goods Sold enter a debit amountEntry field with incorrect answer 91200 enter a credit amountEntry field with correct answer enter an account title to record the lease on January 1, 2017Entry field with correct answer Sales Revenue enter a debit amountEntry field with correct answer enter a credit amountEntry field with incorrect answer 124790 enter an account title to record the lease on January 1, 2017Entry field with correct answer Inventory enter a debit amountEntry field with correct answer enter a credit amountEntry field with correct answer 99200 (To record the lease.) enter an account title to record lease payment on January 1, 2017Entry field with correct answer Cash enter a debit amountEntry field with correct answer 26048 enter a credit amountEntry field with correct answer enter an account title to record lease payment on January 1, 2017Entry field with correct answer Lease Receivable enter a debit amountEntry field with correct answer enter a credit amountEntry field with correct answer 26048 (To record lease payment.) 12/31/17 enter an account title to record interest on December 31, 2017Entry field with correct answer Interest Receivable enter a debit amountEntry field with incorrect answer 11600 enter a credit amountEntry field with correct answer enter an account title to record interest on December 31, 2017Entry field with correct answer Interest Revenue enter a debit amountEntry field with correct answer enter a credit amountEntry field with incorrect answer 11600 (To record interest.) 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