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 $6,000. 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 $200,000, and its cost is $150,000. 4. The equipment has an economic life of 8 years. Carla Vista depreciates all of its equipment on a straight-line basis. 5. 6. Sunland set the annual rental to ensure a 4% rate of return. Carla Vista's incremental borrowing rate is 5%, and the implicit rate of the lessor is unknown. Collectibility of lease payments by the lessor is probable. Both the lessor and the lessee's accounting periods end on December 31. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Prepare all the necessary journal entries for Sunland for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.) Date 1/1/25 2/31/25 2/31/25 Account Titles and Explanation Right-of-Use Asset Lease Liability Lease Liability Cash (To record the lease) Amortization Expense Right-of-Use Asset (To record lease payment) Interest Expense Lease Liability Debit 36426 Credit 36426