Problem 21-06 (Part Level Submission) PLEASE HELP SOLVE PART F. I also have listed below the different factor tables. I am not sure which one to use.

Carla Leasing Company agrees to lease equipment to Sarasota Corporation on January 1, 2020. 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 $517,000, and the fair value of the asset on January 1, 2020, is $657,000.
3.		At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Sarasota estimates that the expected residual value at the end of the lease term will be 55,000. Sarasota amortizes all of its leased equipment on a straight-line basis.
4.		The lease agreement requires equal annual rental payments, beginning on January 1, 2020.
5.		The collectibility of the lease payments is probable.
6.		Carla desires a 10% rate of return on its investments. Sarasotas incremental borrowing rate is 11%, and the lessors implicit rate is unknown.

(Assume the accounting period ends on December 31.)

e.

(f) *Your answer is incorrect. Try again. Suppose Sarasota expects the residual value at the end of the lease term to be $45,000 but still guarantees a residual of $55,000. Compute the value of the lease liability at lease commencement. Lease liability 579765 $ Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS (a) Your answer is correct. Discuss the nature of this lease for both the lessee and the lessor. This is a finance lease for Sarasota. This is a sales-type lease 4 for Carla. Click if you would like to Show Work for this question: Open Show Work C SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT Attempts: 3 of 4 used V (b) Your answer is correct. Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) t p Annual rental payment $ 117413 Click if you would like to Show Work for this question: Open Show Work (c) Your answer is correct. Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) Present value of minimum lease payments 614133 Click if you would like to Show Work for this question: Open Show Work (d) Your answer is correct. Prepare the journal entries Sarasota would make in 2020 and 2021 related to the lease arrangement. (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 answers to 0 decimal places e.g. 58,972. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset 614133 614133 Lease Liability (To record the lease.) Lease Liability 117413 Cash 117413 (To record lease payment.) 12/31/20 - TAmortization Expense 87733 Right-of-Use Asset 87733 (To record amortization.) Tinterest Expense 54639 Lease Liability 54639 (To record interest.) 1/1/21 Lease Liability 117413 Cash 117413 12/31/21 - Amortization Expense 87733 87733 Right-of-Use Asset (To record amortization.) Interest Expense 47734| 47734 Lease Liability (To record interest.) Problem 21-06 (Part Level Submission) el el Prepare the journal entries Carla would make in 2020 and 2021 related to the lease arrangement. (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 answers to 0 decimal places e.g. 58,972. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Lease Receivable 657,000 Cost of Goods Sold 517,000 Sales Revenue 657,000 517,000 Inventory (To record the lease.) 1/1/20 Cash 117,413 Lease Receivable 117,413 (To record lease payment.) 12/31/20 Lease Receivable 53,959 Interest Revenue 53,959 1/1/21 A Cash 117,413 Lease Receivable 117,413 12/31/21 Lease Receivable 47,613 Interest Revenue 47,613 8% 9% Present Value of an Annuity Due of 1 10% 11% 12% 15% (n) Periods 1 1.00000 1.92593 2.78326 3.57710 4.31213 1.00000 1.91743 2.75911 3.53130 4.23972 1.00000 1.90909 2.73554 3.48685 4.16986 1.00000 1.90090 2.71252 3.44371 4.10245 1.00000 1.89286 2.69005 3.40183 4.03735 1.00000 1.86957 2.62571 3.28323 3.85498 2 3 4 5 4.99271 5.62288 6.20637 6.74664 7.24689 4.88965 5.48592 6.03295 6.53482 6.99525 4.79079 5.35526 5.86842 6.33493 6.75902 4.69590 5.23054 5.71220 6.14612 6.53705 4.60478 5.11141 5.56376 5.96764 6.32825 4.35216 4.78448 5.16042 5.48732 5.77158 6 7 8 9 10 7.71008 8.13896 8.53608 8.90378 9.24424 7.41766 7.80519 8.16073 8.48690 8.78615 7.14457 7.49506 7.81369 8.10336 8.36669 6.88923 7.20652 7.49236 7.74987 7.98187 6.65022 6.93770 7.19437 7.42355 7.62817 6.01877 6.23371 6.42062 6.58315 6.72448 11 12 13 14 15 Future Value of 1 (Future Value of a Single Sum) 10% 11% 12% 8% 9% 15% (n) Periods 1 1.08000 1.16640 1.25971 1.36049 1.46933 1.09000 1.18810 1.29503 1.41158 1.53862 1.10000 1.21000 1.33100 1.46410 1.61051 1.11000 1.23210 1.36763 1.51807 1.68506 1.12000 1.25440 1.40493 1.57352 1.76234 1.15000 1.32250 1.52088 1.74901 2.01136 2 3 + LO 6 7 1.58687 1.71382 1.85093 1.99900 2.15892 1.67710 1.82804 1.99256 2.17189 2.36736 1.77156 1.94872 2.14359 2.35795 2.59374 1.87041 2.07616 2.30454 2.55803 2.83942 1.97382 2.21068 2.47596 2.77308 3.10585 2.31306 2.66002 3.05902 3.51788 4.04556 9 10 2.33164 2.51817 2.71962 2.93719 3.17217 2.58043 2.81267 3.06581 3.34173 3.64248 2.85312 3.13843 3.45227 3.79750 4.17725 3.15176 3.49845 3.88328 4.31044 4.78459 3.47855 3.89598 4.36349 4.88711 5.47357 4.65239 5.35025 6.15279 7.07571 8.13706 11 12 13 14 15 8% (n) Periods .92593 .85734 .79383 .73503 .68058 Present Value of 1 (Present Value of a Single Sum) 9% 10% 11% 12% 15% .91743 .90909 90090 .89286 .86957 .84168 .82645 .81162 .79719 ..75614 .77218 .75132 .73119 .71178 .65752 .70843 .68301 .65873 .63552 .57175 .64993 .62092 .59345 .56743 49718 2 3 4 5 6 7 .63017 .58349 .54027 .50025 .46319 .59627 .54703 .50187 46043 42241 .56447 .51316 46651 42410 .38554 .53464 48166 43393 .39092 .35218 .50663 .45235 40388 .36061 .32197 43233 .37594 .32690 .28426 .24719 8 9 10 .42888 .39711 .36770 .34046 .31524 .38753 .35554 .32618 .29925 .27454 .35049 .31863 .28966 .26333 .23939 .31728 .28584 .25751 .23199 20900 .28748 .25668 .22917 20462 .18270 .21494 .18691 .16253 .14133 .12289 11 12 13 14 15 Future Value of an Ordinary Annuity of 1 10% 11% 12% 8% 9% 15% (n) Periods 1.00000 2.08000 3.24640 4.50611 5.86660 1.00000 2.09000 3.27810 4.57313 5.98471 1.00000 2.10000 3.31000 4.64100 6.10510 1.00000 2.11000 3.34210 4.70973 6.22780 1.00000 2.12000 3.37440 4.77933 6.35285 1.00000 2.15000 3.47250 4.99338 6.74238 1 2 3 4 5 6 7.33592 8.92280 10.63663 12.48756 14.48656 7.52334 9.20044 11.02847 13.02104 15.19293 7.71561 9.48717 11.43589 13.57948 15.93743 7.91286 9.78327 11.85943 14.16397 16.72201 8.11519 10.08901 12.29969 14.77566 17.54874 8.75374 11.06680 13.72682 16.78584 20.30372 7 8 9 10 16.64549 18.97713 21.49530 24.21492 27.15211 17.56029 20.14072 22.95339 26.01919 29.36092 18.53117 21.38428 24.52271 27.97498 31.77248 19.56143 22.71319 26.21164 30.09492 34.40536 20.65458 24.13313 28.02911 32.39260 37.27972 24.34928 29.00167 34.35192 40.50471 47.58041 11 12 13 14 15 8% 9% Present Value of an Ordinary Annuity of 1 10% 11% 12% 15% (n) Periods .92593 1.78326 2.57710 3.31213 3.99271 .91743 1.75911 2.53130 3.23972 3.88965 .90909 1.73554 2.48685 3.16986 3.79079 .90090 1.71252 2.44371 3.10245 3.69590 .89286 1.69005 2.40183 3.03735 3.60478 .86957 1.62571 2.28323 2.85498 3.35216 1 2 3 4 5 4.62288 5.20637 5.74664 6.24689 6.71008 4.48592 5.03295 5.53482 5.99525 6.41766 4.35526 4.86842 5.33493 5.75902 6.14457 4.23054 4.71220 5.14612 5.53705 5.88923 4.11141 4.56376 4.96764 5.32825 5.65022 3.78448 4.16042 4.48732 4.77158 5.01877 6 7 8 9 10 7.13896 7.53608 7.90378 8.24424 8.55948 6.80519 7.16073 7.48690 7.78615 8.06069 6.49506 6.81369 7.10336 7.36669 7.60608 6.20652 6.49236 6.74987 6.98187 7.19087 5.93770 6.19437 6.42355 6.62817 6.81086 5.23371 5.42062 5.58315 5.72448 5.84737 11 12 13 14 15