The following facts pertain to a non-cancelable lease agreement between Blossom Leasing Company and Kingbird Company, a lessee.

Commencement date		May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020		$19,656.69
Bargain purchase option price at end of lease term		$7,000
Lease term		5	years
Economic life of leased equipment		10	years
Lessors cost		$65,000
Fair value of asset at May 1, 2020		$93,000
Lessors implicit rate		6	%
Lessees incremental borrowing rate		6	%

The collectibility of the lease payments by Blossom is probable.

Prepare the journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Kingbirds annual accounting period ends on December 31. Reversing entries are used by Kingbird. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.)

Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Kingbird's annual accounting period ends on December 31. Reversing entries are used by Kingbird. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 5/1/20 Right-of-Use Asset 93000 Lease Liability 93000 (To record the lease) 5/1/20 Lease Liability 19657 Cash 19657 (To record the first lease payment) 12/31/20 Amortization Expense 11467 Right-of-Use Asset 11467 (To record interest expense) 12/31/20 Interest Expense 2934 Lease Liability 2934 (To record amortization of the right-of-use asset) 1/1/21 Lease Liability 2934 Interest Expense 2934 12/31/20 Interest Expense 2934 Lease Liability 2934 (To record amortization of the right-of-use asset) 1/1/21 Lease Liability 2934 Interest Expense 2934 5/1/21 Interest Expense 4401 Lease Liability 15256 Cash 19657 12/31/21 Amortization Expense 17200 Right-of-Use Asset 17200 (To record interest expense) 12/31/21 Interest Expense 2323 Lease Liability 2323 (Taracord amortization of the riabit of accet