Recording Sales-Type Lease, Unguaranteed Residual Value-Lessor Flint Company leased equipment to Land Company for a five-year period. Flint paid $46,965 for the equipment, which equals its current carrying value (with estimated useful life of five years). The lease commenced on January 1 of Year 1. Flint uses a target rate of return of 8% in all lease contracts. The first payment was received on January 1 of Year 1, and Flint's accounting periods end on December 31. The equipment reverts to Flint at the end of the lease term, at which time Flint estimates that the equipment will have an unguaranteed residual value of $2,000. Hint: Underlying asset's carrying value equals its fair value at lease commencement. c. Provide journal entries for Year 1 and Year 2 for the lessor assuming that the equipment is held in the lessor's Inventory account. Note: Round your answers to the nearest whole dollar. Date Account Name Jan. 1, Year 11 Lease Receivable Inventory To record lease receivable Jan. 1, Year 1 Cash Lease Receivable To record lease payment Dec. 31, Year 1 Lease Receivable Interest Revenue To record interest Jan. 1, Year 2 Cash Lease Receivable > Dr. Cr. 79,841 0 x 0 79,841 x 17,979 0 x 0 17,979 x 4,949 0 x 0 4,949 x 17,979 0 x 0 17,979 x To record lease payment Dec. 31, Year 2 Lease Receivable 3,907 0 x Interest Revenue 0 3,907 x To record interest d. Record the entry on December 31 of Year 5 for the return of the equipment assuming the equipment had a fair value of $2,000. Date Account Name Dec. 31, Year 5 Inventory Lease Receivable To record return of equipment. Dr. Cr. 3,400 0 x 0 3,400 x