On January 1, 2025, Sunland Company leased equipment to Carla Vista Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Carla Vista has the option to purchase the equipment for $2.000, while the expected residual value at the end of the lease is $5,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2025. 3. The fair value of the equipment on January 1,2025 , is $140,000, and its cost is $110,000. 4. The equipment has an economiclife of 8 years. Carla Vlsta depreciates all of its equipment on a straight-line basis. 5. Sunland set the annual rental to ensure a 5% rate of return. Carla Vista's incremental borrowing rate is 6%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments by the lessor is probable Both the lessor and the lessee's accounting periods end on December 31 repare all the necessacy journal entries for Carla Vista for 2025. (List all debit entries before credit entnies. Credit account vities are automaticall. he amounts. Round onswers to 0 decimal places, es, 5,275. Record joumal entries in the order presented in the problem.)