Problem 21A-1 a-c (Part Level Submission) The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sheridan Company, a lessee Commencement date Annual lease payment due at the beginning of January 1, 2017 $100,640 $46,000 each year, beginning with January 1, 2017 Residual value of equipment at end of le ase term guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $41,000 6 years 6 years $557,000 6% 6% The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view the factor table, Your answer is correct. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.) SHERIDAN COMPANY (Lessee) Lease Amortization Schedule Interest on Annual Lease Payment Plus GRV Reduction of Lease Liabilit Date Liabilit Lease Liabili 100640 100640 100640 100640 100640 100640 25647 21148 16378 11323 5964 282 100640 74993 79492 84262 89317 94676 4718 528098 528098 427458 352465 272973 188711 99394 4718 1/1/20 1/1/21 1/1/22 12/31/22 99394 5000 6088404 80742s (b) Your answer is partially correct. Try again. Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (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. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.,) Date Account Titles and Explanation Credit Debit Jan. 1, 2017Right-of-Use Asset 528098 528098 Lease Liability To record the lease.,) Lease Liability 100640 Cash 100640 (To record first lease payment.) Interest Expense Lease Liability (To record interest.) Dec. 31, 2017 25647 25647 Amortization Expense 427458 Right-of-Use Asset 100640 (To record amortization.) Jan. 1, 2018Lease Liability 25647 25647 Interest Expense To reverse the December 31entry) Interest Expense Lease Liability 25647 74993 Cash 100640 To record the second lease payment.) Dec. 31, 2018 Interest Expense Lease Liability To record interest.) 21148 21148 Amortization Expense 74993 Right-of-Use Asset 352465 To record amortization.) Your answer is incorrect. Try again. Suppose Sheridan received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? Right-of-use asset 528098 What if Sheridan prepaid rent of $5,000 to Faldo? Right-of-use asset 529573