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Bonita Leasing Company agrees to lease equipment to Windsor Corporation on January 1, 2025. The following information relates to the lease agreement 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $559,000, and the fair value of the asset on January 1, 2025, is $724,000. 3. At the end of the iease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Windsor estimates that the expected residual value at the end of the lease term will be 560,000 . Windsor amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 5. The collectibility of the lease poyments is probsble. 6. Bonita desires a 10x rate of return on its investments. Windsor's incremental borrowing rate is 11%, and the lessor's implicit rate is anknown Discuss the nature of this lease for both the lessee and the lessor: This is a for Windsor. This is a for Bonita. Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final onswer to 0 decimal ploces eg. 58,972.) Annual rental payment Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to 0 decimal places es. 58,972.1 Present value of minimum lease payments Prepare the journal entries Windsor would make in 2025 and 2026 related to the lease arrangement. (Credit account titles are outomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the occount titles and enter 0 for the amounts. Round anwers to 0 decimal ploces es. 58,972 . Record journal entries in the order presented in the problem. List. all debit entries before credit entries) (To record amortization.) 12/31/25 Interest Expense (To record interest.) 1/1/26 Lease Lablity 129445 \begin{tabular}{|} \hline \\ \hline 129445 \\ \hline \end{tabular} 12/31/26 Amortination Expense 96724 Right of-Uie Asset (To record amortization.) 12/31/26 Interest Fagense Prepare the fournal entries Bonita would make in 2025 and 2026 related to the lease arrangement. (Credit account tities are outomotically indented when amount is enterd. Do not indent manually. If no entry is required, select "Mo Entry" for the occount tities and enter 0 for the amounts. Round onswers to 0 decimal ploces es. 58,972 . Record journal entries in the order presented in the problem. List all debit entries before credit entries. (To record lease payment) Suppose Windsor expects the residual value at the end of the lease term to be $50,000 but still guarantees a residual of $60,000. Compute the value of the lease liability at lease commencement. (Round present value factor calculations to 5 decimal ploces es. 1.25124 and the final answer to 0 decimal ploces eg.58.972.) Lease liability