The following facts pertain to a non-cancelable lease agreement between Ivanhoe Leasing Company and Metlock Company, a lessee. May 1, 2020 $ 17,225,30 $4,000 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 implicitrate Lessee's incremental borrowing rate 5 years 10 years $55,000 $77.000 X 8 % 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) X Your answer is incorrect. Discuss the nature of this lease to Metlock. The nature of this lease to Metlock is a operating lease e Textbook and Media List of Accounts X Your answer is incorrect, Discuss the nature of this lease to Ivanhoe. The nature of this lease to Ivanhoe is a operating lease 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.) Date Account Titles and Explanation Debit Credit 5/1/20 Right-of-Use Asset 77,000 Lease Liability (To record the lease) 5/1/20 Lease Liability 17.225.30 Cash 17 (To record the first lease payment) 12/31/20 Interest Expense 10266 67 Interest Payablet 100 (To record interest expense) 12/31/20 Depreciation Expense 3187.98 3187.98 12/31/20 Depreciation Expense 31 Accumulated Depreciation-Right-of-Use Asset (To record amortization of the right-of-use asset) 12/31/21 17.225.30 172 5/1/21 Interest Payable 17,225,30 156 Lease Liability 15 Cash 12/31/21 Interest Expense 3187.98 31 Interest Payable (To record interest expense) 12/31/21 Depreciation Expense 252434 25 Accumulated Depreciation.Rightof-Use Asset