PronghornCorporation leased equipment toLarkspur, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,179at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $8,900, a book value of $6,900, andPronghornexpects a residual value of $6,400at the end of the lease term.Pronghornset the lease payments with the intent of earning a5% return, thoughLarkspuris unaware of the rate implicit in the lease and has an incremental b

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Determine the nature of the lease to both Pronghorn and Larkspur. The lease is a/an lease to Larkspur. The lease is a/an lease to Pronghorn. eTextbook and Media List of Accounts Prepare all necessary journal entries for Larkspur in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment)How would the measurement of the lease liability and rightofuse asset be affected if, as a result of the lease contract, Larkspur was also required to pay $600 in commissions, prepay $700 in addition to the rst rental payment, and pay $250 of insurance each year? (Round answers to 0 decimal places, e3. 5,275.) Lease liability $ Right-ofuse-asset $ eTextbook and Media List of Accounts Suppose, instead of a 3year lease term, Larkspur and Pronghorn agree to a one-year lease with a payment of $1,179 at the start of the lease. Prepare necessaryjou rnal entry for Larkspur in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20