Question 4 --/1 View Policies Current Attempt in Progress Sheffield Corporation leased equipment to Sage Hill, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,089 at the beginning of each year of the 4-year lease. The equipment has an economic useful life of 8 years, a fair value of $8,600, a book value of $6,600, and Sheffield expects a residual value of $6,100 at the end of the lease term. Sheffield set the lease payments with the intent of earning a 7% return, though Sage Hill is unaware of the rate implicit in the lease and has an incremental borrowing rate of 9%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What is the amount of the rental payments used in the lease agreement? (Round answer to 0 decimal places, e.g. 5,275.) Rental payments $ e Textbook and Media List of Accounts Prepare the entries for Sheffield for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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 Debit Credit (To record the recognition of the revenue) (To record depreciation expense on the leased equipment) How would Sheffield's accounting in part a change if it incurred legal fees of $700 to execute the lease documents and $400 in advertising expenses for the year in connection with the lease? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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 Debit Credit