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Tartufo Corp. entered into a 5-year lease agreement with Gelato Inc. to lease equipment beginning on January 1, 20X5. The IBR is 9% while the

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Tartufo Corp. entered into a 5-year lease agreement with Gelato Inc. to lease equipment beginning on January 1, 20X5. The IBR is 9% while the rate implicit in the lease is 8%. Tartufo Corp. is aware of the rate implicit in the lease. Annual payments of $61,500 at the beginning of the year are required. The lease stipulates a $50,000 resid ual value guarantee but Tartufo Corp. expects a $10,000 payout will be required. Tartufo Corp. will return the equipment to Gelato Inc. at the end of the lease term. Required: Provide journal entries pertaining to this lease for Tartufo Corp. for the 20X5 year. Tartufo Corp. uses straight- line depreciation for similar assets, with a half-year of deprecation recorded in the year of acquisition

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