Sage Corporation enters into a7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $39,300each, beginning December 31, 2019. In addition,Sage guarantees the lessor a residual value of $19,200at the end of the lease. However, Sage believes it is probable that the expected residual value at the end of the lease term will be $9,600. The equipment has a useful life of7years.

Prepare Sages' December 31, 2019, journal entries assuming the implicit rate of the lease is9% and this is known toSage.(Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)

SageCorporation enters into a7-year lease of equipment on December 31, 2019, which requires7annual payments of $39,300each, beginning December 31, 2019. In addition,Sageguarantees the lessor a residual value of $19,200at the end of the lease. However,Sagebelieves it is probable that the expected residual value at the end of the lease term will be $9,600. The equipment has a useful life of7years.

PrepareSages' December 31, 2019, journal entries assuming the implicit rate of the lease is9% and this is known toSage.(Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)

I know 53,686 and 55,653 are both incorrect

Click here to View factor tables. Date Account Titles and Explanation Debit Credit December Right-of-Use Asset | 221067 | 31, 2019 Lease Liability 221067 (To record the lease liability) 516:2:31126 r Lease Liability l 39300 | Cash | | 39300 (To record lease payment)