Prepare the journal entry for Daylight at lease commencement, assuming initial direct costs of $3,900 are incurred by Daylight to negotiate the lease. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Right-of-Use Asset Cash Lease Liability eTextbook and Media List of Accounts Debit Credit 3900 On January 1, 2020, Wildhorse Company leased equipment to Daylight Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 4 years. At the end of the lease term, Daylight has the option to purchase the equipment for $2,100, while the expected residual value at the end of the lease is $15,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2020. 3. The fair value of the equipment on January 1, 2020, is $221,000, and its cost is $192,000. 4. The equipment has an economic life of 5 years. Daylight depreciates all of its equipment on a straight-line basis. 5. 6. Wildhorse set the annual rental to ensure a 4% rate of return. Daylight'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.)