Splish Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $39,500 each, beginning December 31, 2019. In addition, Splish guarantees the lessor a residual value of $20,700 at the end of the lease. However, Splish believes it is probable that the expectec residual value at the end of the lease term will be $10,700. The equipment has a useful life of 7 years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $170,000 Prepare Lost Ark's 2019 and 2020 journal entries, assuming the implicit rate of the lease is 11% and this is known to Splish. (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 decimal places eg. 5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables. Debit Credit Date December 31, 2019: Account Titles and Explanation Lease Receivable 216,576 Cost of Goods Sold 170,000 Sales Revenue 216,576 170,000 Inventory (To record the lease) Cash December 31, 2019 39,500 39,500 Lease Receivable (To record receipt of lease payment) Cash December 31, 2020 39,500 Lease Receivable Interest Revenue