Questi O15 1.67/5 On January 1, 2020, Metlock Co. leased a building to Ivanhoe Inc. The relevant information related to the lease is as follows 1. 2. 3. The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3.000.000 (unguaranteed). The leased building has a cost of $3,500,000 and was purchased for cash on January 1, 2020. The building is depreciated on a straight-line basis. Its estimated economic lite is 50 years with no salvage value Lease payments are $270,000 per year and are made at the beginning of the year. Ivanhoe has an incremental borrowing rate of 9%, and the rate implicit in the lease is unknown to Ivanhoe, Both the lessor and the lessee are on a calendar-year basis. 5. 6. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 1/1/20 v Buildings 3500000 Cash 3500000 (To record cost of the building) 1/1/20 Cash 270000 Unearned Lease Revenue 270000 (To record receipt of lease payment) 12/31/20 Unearned Lease Revenue 270000 Lease Revenue 270000 (To record the recognition of the revenue each period) Unearned Lease Revenue 270000 (To record receipt of lease payment) 12/31/20 Unearned Lease Revenue 270000 Lease Revenue 270000 (To record the recognition of the revenue each period) 12/31/20 Depreciation Expense 70000 Accumulated Depreciation Leased Buildings 70000 (To record depreciation expense on the leased asset) Prepare the journal entries that Ivanhoe should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to decimal places, eg. 5.275. Record journal entries in the order presented in the problem) Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset Lease Liability (To record the lease) 1/1/20 Lease Liability 270000 Cash 270 (To record lease payment) (To record the lease) 1/1/20 Lease Liability 270000 270000 Cash (To record lease payment) 270000 12/31/20 Lease Expense I Lease Liability Right-of-Use Asset