The following facts pertain to a non-cancelable lease agreement between Ivanhoe Leasing Company and Metlock Company, a lessee. May 1, 2020 $17,865.02 $7,000 5 years Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate 10 years $65,000 $85,000 6 % 6 % The collectibility of the lease payments by Ivanhoe is probable Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) METLOCK COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability Annual Lease Payment Plus BPO Date 5/1/20 i 5/1/20 17,865.02 17,865,02 5/1/21 17,865.02 4,028.10 13,836.92 5/1/22 17,365.02 3,197.88 14,667.14 5/1/23 17,86502 2,317 86 15,547 16 5/1/24 17,865,02 1.385.03 16,479.99 4/30/25 7.000 396.15 6,60385 $ 96,325.10 $ 11,325.02 $ 85.000.00 METLOCK COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability ease Payment Plus BPO Lease Liability 85,000 17,865.02 67.134,98 17,865,02 17.865.02 4,028.10 13,836.92 53,298.06 17.865.02 3.197.88 14,667.14 38,630.92 1786502 2,317.86 15,547.16 23,083.76 17.865 02 138503 16,479.99 6,603.77 7.000 396.15 6,603.85 O 96,325.10 $ 11.325.02 85,000.08 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. Motlock's annual accounting period ends on December 31 Reversing entries are used by Metlock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. 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 Debit Credi 5/1/20 Right-of-Use Asset 85000 Lease Liability (To record the lease) 5/1/20 17365.02 Lease Liability Cash (To record the first lease payment) Interest Expense (To record interest expense) - Amortization Expert Foto Use A 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. Metlock's annual accounting period ends on December 31. Reversing entries are used by Metlock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, eg. 5,275.15. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit Credit Right-of-Use Asset 85000 85000 Lease Liability (To record the lease) Lease Liability 17865.02 Cash 17865.02 (To record the first lease payment) Interest Expense (To record interest expense) | Amortization Expense Right of Use Asset (To record interest expense) IN IM 5/1/20 12/31/20 (To record amortization of the right-of-use asset) 1/1/21 S121 123121 Media II IIIITTO (To record interest expense) - (To record amortization of the right-of-use asset)