On January 1, 2020, Sheridan Company contracts to lease equipment for 5 years, agreeing to make a payment of $138,134 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $576,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Sheridan's incremental borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Sheridan. Title to the equipment transfers to Sheridan at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables. (b) Your answer is correct. Prepare the journal entries that Sheridan should record on January 1, 2020. (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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation January 1,2020 Right-of-Use Asset Lease Liability (To record the lease.) Lease Llability Cash (To record lease payment.) Debit 576000 138134 Credit 576000 138134 Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2020. (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 O for the amounts. Round answers to O decimal places, e.g. 5,275.) (d) Date Account Titles and Explanation December 31, 2020 Amortization Expense Right-of-Use Asset (To record amortization of the leased asset.) December 31,2020 Interest Expense Lease Llability eTextbook and Media List of Accounts Your answer is correct. Debit 230400 43787 Credit 230400 43787 Attempts: 1 of 3 used Prepare the journal entry to record the lease payment of January 1, 2021, assuming reversing entries are not made. (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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation January 1,2021 Lease Llability Cash Debit 138134 Credit 138134 Your answer is correct. What amounts will appear on the lessee's December 31, 2020, balance sheet relative to the lease contract? SHERIDAN COMPANY Noncurrent Assets Right-of-Use Asset Current Liabilities (F) Lease Liability Noncurrent Llabilities Lease Llability Balance Sheet (Partial) December 31, 2020 eTextbook and Media List of Accounts Assets Liabilities $ 345600 69 69 138134 343519 Attempts: 1 of 3 used How would the value of the lease liability in part b change if Sheridan also agreed to pay the fixed annual insurance on the equipment of $2,000 at the same time as the rental payments? (Round answers to O decimal places, e.g. 5,275.) The lease liability $ eTextbook and Media