The following facts pertain to a non-cancelable lease agreement between Splish Brothers Leasing Company and Sunland Company, a lessee. Commencement date May 1, 2025 Annual lease payment due at the beginning of each year, beginning with May 1, 2025 $15,143.26 Bargain purchase option price at end of lease term $4,000 Lease term Economic life of leased equipment 5 years 10 years Lessor's cost $50,000 Fair value of asset at May 1, 2025 $73,399.50 Lessor's implicit rate 4 % Lessee's incremental borrowing rate 4 % The collectibility of the lease payments by Splish Brothers is probable. Your answer is correct. Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.) Lease receivable at commencement $ 73399.50 i eTextbook and Media List of Accounts Attempts: 1 of 4 used al Lease Payment Plus BPO SPLISH BROTHERS LEASING COMPANY (Lessor) Lease Amortization Schedule Interest on Lease Receivable 15143.26 Recovery of Lease Receivable Lease Receivable 15143.26 73399.50 i 58256.24 15143.26 2330.25 12813.01 45443.23 15143.26 1817.73 13325.53 32117.70 15143.26 1284.71 13858.55 18259.15 15143.26 4000 730.37 153.85 14412.89 3846.26 3846.15 79716.30 6316.91 $ 73399.50 Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2025 and 2026. The lessor's accounting period ends on December 31. Reversing entries are not used by Splish Brothers. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, eg. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 5/1/25 Lease Receivable Sales Revenue Cost of Goods Sold Inventory (To record the lease) (To record lease payment) Debit 73399.50 50000 Credit 7339 SC 5/1/26 Cash leas 12/31/26 V Interest Receivable Interest Revenue