Problem 21-03 Riverbed Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $43,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Riverbed's incremental borrowing rate is 9%. Riverbed is unaware of the rate being used by the lessor. At the end of the lease, Riverbed has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Riverbed uses the straight-line method of depreciation on similar owned equipment. Click here to view factor tables. Your answer is partially correct. Try again. Prepare the journal entries, that Riverbed should record on December 31, 2020. (Credit account titles are automatically indented when 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 present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to o decimal places, e.g. 58,971.) Credit Date Account Titles and Explanation December 31, 2020 Debit $185,558 $185,558 Lease Liability (To record leased asset and related liability.) Lease Liability Cash (To record the first rental payment.) Your answer is partially correct. Try again. Prepare the journal entries, that Riverbed should record on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Debit Credit Date Account Titles and Explanation December 31, 20211 L 26,508 26,508 (To record amortization.) Interest Expense $12,830 30,170 C 43000 (To record annual payment on lease liability.) Your answer is partially correct. Try again. Prepare the journal entries, that Riverbed should record on December 31, 2022. (Credit account tities are automatically indented when 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. 58,971.) Debit Credit Date Account Titles and Explanation December 31, 2022 i (To record annual amortization on leased assets.) Interest Expense (To record annual payment on lease liability)