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On July 1, 2019, Jupiter Company leased equipment to Planet Company. The terms of the lease are as follows: Fair value of leased asset 70,000

On July 1, 2019, Jupiter Company leased equipment to Planet Company. The terms of the lease are as follows:

Fair value of leased asset

70,000

Lease payments, due each Jul 1

12,000

Lease term

9 years

Economic life of leased asset

10 years

Guaranteed residual value

6,000

Expected payout under the guaranteed residual

6,000

Implicit rate in the lease (not readily determinable by lessee)

13%

Lessee's incremental borrowing rate

15%

Planet uses straight-line depreciation for its property, plant, and equipment, and its year -end is December 31.

Required:

What would the journal entries for the lessee from July 1 through December 31, 2019 be?

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