The following facts pertain to a non-cancelable lease agreement between Cullumber Leasing Company and Crane Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee January 1, 2025 $97,312 Prepare all of the journal entries for the lessee for 2025 and 2026 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (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 O for the amounts. Round answers to O decimal places e.g. 5,275. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit $55,000 Expected residual value of equipment at end of lease term Lease term $50,000 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2025 $546,000 Lessor's implicit rate Lessee's incremental borrowing rate 6% 6 % (To record the lease.) The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Table shows the amortization schedule for lessee for the lease term: (To record first lease payment.) Date Lease payment (A) Interest expense Reduction in liability (B = Prev D*6%) (C=A-B) Lease liability (D = Prev D - C) 1/1/25 $510,750 1/1/25 $97,312 $97,312 $413,438 1/1/26 $97,312 $24,806 $72,506 $340,932 1/1/27 $97,312 $20,456 $76,856 $264,076 1/1/28 $97,312 $15,845 $81,467 $182,609 1/1/29 $97,312 $10,957 $86,355 $96,253 1/1/30 $97,312 $5,775 $91,537 $4,717 12/31/30 $5,000 $283 $4,717 SO (To record interest.) (To record amortization.) (To record amortization.) (To record interest.)