Sheridan Co. leased machinery from Young, Inc. on January 1,2020 . The lease term was for 8 years, with equal annual rental payments of $5,900 at the beginning of each year. In addition, the lease provides an option to purchase the machinery at the end of the lease term for $2,000, which $ heridan is reasonably certain it will exercise as it believes the fair value of the machinery will be at least $5,000. The machinery has a useful life of 10 years and a fair value of $44,000. The implicit rate of the lease is not known to Sheridan. Sheridan's incremental borrowing rate is 10%. Prepare Sheridan's 2020 journal entries. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.) Click here to view factor tables