Problem 21A-2 b-f (Part Level Submission) On January 1, 2017, Pronghorn Company contracts to lease equipment for 5 years, agreeing to make a payment of $879,904 at the beginning of each year, starting January 1, 2017. The leased equipment is to be capitalized at $4,000,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Pronghorn's incremental borrowing rate is 6%, and the implicit rate in the lease is 5%, which is known by Pronghorn. Title to the equipment transfers to Pronghorn at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2017. (Credit account titles are automatically inden Entry" for the account titles and enter o for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2017 Tamortization Expense 1,600,000 1,600,000 Right-of-Use Asset (To record amortization of the leased asset.) December 31, 2017 Interest Expense Lease Liability 156,005 156.005 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT (d) Your answer is correct. Prepare the journal entry to record the lease payment of January 1, 2018, assuming reversing entries are not made. (Credit account titles are automatically 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 a Account Titles and Explanation Debit Credit Date January 1, 2018 Lease Liability 879,904 Cash 879,904 What amounts will appear on the lessee's December 31, 2017, balance sheet relative to the lease contract? PRONGHORN COMPANY Balance Sheet (Partial) December 31, 2017 Assets Noncurrent Assets Right-of-Use Asset 2,400,000 Liabilities Current Liabilities Interest Expense 879,904 Noncurrent Liabilities X Lease Liability 2,964,091 Click if you would like to Show Work for this question: Open Show Work