Sheffield Corporation leased equipment to Shamrock, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,267 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $9,300, a book value of $7,300, and Sheffield expects a residual value of $6,800 at the end of the lease term. Sheffield set the lease payments with the intent of earning a 6% return, though Shamrock is unaware of the rate implicit in the lease and has an incremental borrowing rate of 8%. 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.) Determine the nature of the lease to both Sheffield and Shamrock. ease to Shamrock. The lease is a/arv financing operating The lease is a/an lease to Sheffield. eTextbook and Media List of Accounts Prepare all necessary journal entries for Shamrock in 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 lease) (To record lease payment) How would the measurement of the lease liability and right-of-use asset be affected if, as a result of the lease contract, Shamrock was also required to pay $600 in commissions, prepay $800 in addition to the first rental payment, and pay $150 of insurance each year? (Round answers to O decimal places, e.g. 5,275.) Lease liability Right-of-use-asset $ e Textbook and Media List of Accounts Suppose, instead of a 3-year lease term, Shamrock and Sheffield agree to a one-year lease with a payment of $1,267 at the start of the lease. Prepare necessary journal entry for Shamrock in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation 1/1/20 Sheffield Corporation leased equipment to Shamrock, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,267 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $9,300, a book value of $7,300, and Sheffield expects a residual value of $6,800 at the end of the lease term. Sheffield set the lease payments with the intent of earning a 6% return, though Shamrock is unaware of the rate implicit in the lease and has an incremental borrowing rate of 8%. 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.) Determine the nature of the lease to both Sheffield and Shamrock. ease to Shamrock. The lease is a/arv financing operating The lease is a/an lease to Sheffield. eTextbook and Media List of Accounts Prepare all necessary journal entries for Shamrock in 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 lease) (To record lease payment) How would the measurement of the lease liability and right-of-use asset be affected if, as a result of the lease contract, Shamrock was also required to pay $600 in commissions, prepay $800 in addition to the first rental payment, and pay $150 of insurance each year? (Round answers to O decimal places, e.g. 5,275.) Lease liability Right-of-use-asset $ e Textbook and Media List of Accounts Suppose, instead of a 3-year lease term, Shamrock and Sheffield agree to a one-year lease with a payment of $1,267 at the start of the lease. Prepare necessary journal entry for Shamrock in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation 1/1/20