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 Llability (To record the lease.) Lease Llability Cash (To record lease payment.) Debit 576000 138134 Credit 576000 138134 (c) 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.) Date December 31, 2020 Account Titles and Explanation December 31, 2020 (To record amortization of the leased asset.) eTextbook and Media List of Accounts Save for Later Debit Credit Attempts: 0 of 3 used Submit Answer (d) The parts of this question must be completed in order. This part will be available when you complete the part above. (e) The parts of this question must be completed in order. This part will be available when you complete the part above. (F) The parts of this question must be completed in order. This part will be available when you complete the part above