Sandhill Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $29,300 at the beginning of each year. The first payment is received on January 1, 2020. Sandhill had purchased the machine during 2019 for $150,000. Collectibility of lease payments by Sandhill is probable. Sandhill set the annual rental to ensure a 4% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Sandhill at the termination of the lease. Assume that Dexter Corporation does not know the rate implicit in the lease used by Sandhill, and Dexter's incremental borrowing rate is 6%. In addition, assume that Dexter incurs initial direct costs of $11,000. Prepare all necessary journal entries for Dexter for 2020. (Credit account titles are automatically indented when 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 1/1/20 Right-of-Use Asset Lease Liability Sales Revenue (To record the lease) 1/1/20 Lease Liability Inventory (To record the first lease payment) 12/31/20 Cash Lease Receivable (To record interest expense) 12/31/20 Interest Receivable Interest Revenue (To record amortization of the right-of-use asset)