The following facts pertain to a non-cancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee. Commencement date May 1.2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $20,471.94 Bargain purchase option price at end of lease term $4.000 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $65.000 Fair value of assetat May 1, 2020 $91,000 Lessor's implicit rate 8 % Lessee's incremental borrowing rate 8 % The collectibility of the lease payments by Mooney is probable. > Your answer is correct. 0.75/1 Discuss the nature of this lease to Rode. The nature of this lease to Rode is a finance lease. e Textbook and Media List of Accounts Attempts: 2 of 3 used (b) Your answer is correct. Discuss the nature of this lease to Mooney. The nature of this lease to Mooney is a sales-type lease. e Textbook and Media List of Accounts Attempts: 2 of 3 used eb82ac#/question/8 Question 9 of 12 0.75 RODE COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Plus BPO Date Interest on Liability Reduction of Lease Liability Le 5/1/20 $ 0 $ 0 $ 0 $ 5/1/20 20471.94 0 20471.94 5/1/21 20471.94 5642.24 14829.70 5/1/22 20471.94 4455.87 16016.07 5/1/23 20471.94 3174.58 17297.36 5/1/24 20471.94 1790.79 18681.15 4/30/25 4000 296.30 3703.70 $ 106359.70 $ 15359.79 $ 91000 0.75/1 RODE COMPANY (Lessee) Lease Amortization Schedule Interest on Liability Reduction of Lease Liability Lease Liability 0 $ 0 $ 91000 0 20471.94 70528.06 5642.24 14829.70 55698.36 4455.87 16016.07 39682.29 3174.58 17297.36 22384.93 1790.79 18681.15 3703.78 296.30 3703.70 0 5 15359.79 $ $ 91000 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. Rode's annual accounting period ends on December 31. Reversing entries are used by Rode. (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 (To record the lease) (To record the first lease payment) (To record interest expense) (To record amortization of the right-of-use asset) -Use asset) 5/1/20 12/31/20 1/1/21 5/1/21 12/31/21 (To record interest expense) (To record amortization of the right-of-use asset)