On January 1, 2020, Culver Animation sold a truck to Peete Finance for $42,000 and immediately leased it back. The truck was carried on Culver's books at $37,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Culver at lease-end. The lease requires three equal rental payments of $12,000 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 7%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Culver's 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date Account Titles and Explanation Debit Credit 1/1/20 Cash 42,000 Trucks 37,000 Unearned Profit on Sale-Leaseback 5,000 (To record sale of truck) 1/1/20 Leased Equipment 42,000 Lease Liability 42,000 (To record lease liability) 12/31/20 Interest Expense 2.940 Lease Liability 9,060 Cash 12,000