Sheridan Dairy Ltd. leases its milk cooling equipment from Concord Finance Corporation. Both companies use IFRS 16. The lease has the following terms. 1. The lease is dated May 30, 2020, with a lease term of eight years. It is non-cancellable and requires equal rental payments of $29,200 due each May 30, beginning in 2020. 2. The equipment has a fair value and cost at the inception of the lease of $207,075, an estimated economic life of 10 years, and a residual value (which is guaranteed by Lanier Dairy) of $23,700. 3. The lease contains no renewal options and the equipment reverts to Concord Finance Corporation on termination of the lease. 4. Sheridan Dairy's incremental borrowing rate is 6% per year; the implicit rate is also 6%. 5. Sheridan Dairy uses straight-line depreciation for similar equipment that it owns. 6. Collectibility of the payments is reasonably predictable, and there are no important uncertainties about costs that have not yet been incurred by the lessor. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Using tables, a financial calculator, or Excel functions, calculate the PV of the lease payments and guaranteed residual value under the lease. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) PV of the lease payments and guaranteed residual value $ Prepare the journal entries for the lessee and lessor at May 30, 2020, and at December 31, 2020, which is the lessee's and lessor's year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Lessee: Date May 30, 2020 Account Titles and Explanation Dec. 31, 2020 (To record inception of lease and first payment.) Dec. 31, 2020 Lessor: (To record interest.) (To record depreciation expense.) Debit Credit Lessor: Date Account Titles and Explanation Debit Credit May 30, 2020 May 30, 2020 (To record inception of lease.) (Collection of lease payment.) Dec. 31, 2020 (To record interest.) Prepare the journal entries at May 30, 2021 for the lessee and lessor. Assume reversing entries are not used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275.) Lessee: Date Account Titles and Explanation May 30, 2021 Lessor: (To record lease payment.) Debit Credit Date Account Titles and Explanation Debit Credit May 30, 2021 (To record interest.) May 30, 2021 (Collection of lease payment.) What amount would have been capitalized by the lessee upon inception of the lease if: (Round answers to O decimal places, e.g. 5,275.) 1. The residual value of $23,700 had been guaranteed by a third party, not the lessee? $ 2. The residual value of $23,700 had not been guaranteed at all? $ eTextbook and Media List of Accounts On the lessor's books, what amount would be recorded as the net investment at the inception of the lease, assuming: (Round answers to O decimal places, e.g. 5,275.) 1. Concord Finance had incurred $1,200 of direct costs in processing the lease? $ 2. The residual value of $23,700 had been guaranteed by a third party? $ 3. The residual value of $23,700 had not been guaranteed at all? $ Assume that the milk cooling equipment's useful life is 20 years. How large would the residual value have to be at the end of eight years in order for the lessee to qualify for the operating method assuming ASPE applies? Assume that the residual value would be guaranteed by a third party. (Hint: The lessee's annual payments will be appropriately reduced as the residual value increases.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) The residual value would have had to be greater than $