Recording Finance Lease Journal Entries - Guaranteed Residual Value Smith, the lessec, 5 igns an 8-year lease agreement for a floor of a building on December 31 that requires annual payments of 542.000 , beginning immediately. The residual value of $30,000 is guaranteed to the lessor at the end of the lease term. 5mith estimates a residual vatue of 518,000 at the end of the lease term. Smith is aware of the lessor's implicit rate of interest of 7 \%h. Record Smith's journat entries on December 31 , assuming that the lease is properly chassified as a finance lease