Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life of 8 years, and no estimated residual value. The appropriate interest rate is 8%.

Prepare Teal Mountain's 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a straight-line basis. (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.)

Date Account Titles and Explanation Debit Credit

enter an account title To record lease liability on December 31 2019 enter a debit amount enter a credit amount

enter an account title To record lease liability on December 31 2019 enter a debit amount enter a credit amount

(To record lease liability)

enter an account title To record lease payment on December 31 2016 enter a debit amount enter a credit amount

enter an account title To record lease payment on December 31 2016 enter a debit amount enter a credit amount

(To record lease payment)

enter an account title To record interest expense on December 31 2020 enter a debit amount enter a credit amount

enter an account title To record interest expense on December 31 2020 enter a debit amount enter a credit amount

enter an account title To record interest expense on December 31 2020 enter a debit amount enter a credit amount

(To record interest expense)

enter an account title To record amortization of the right-of-use asset on December 31 2020 enter a debit amount enter a credit amount

enter an account title To record amortization of the right-of-use asset on December 31 2020 enter a debit amount enter a credit amount

(To record amortization of the right-of-use asset)