On January 1, 2020, Teal Mountain Co. leased a building to Sandhill Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3,700,000 (unguaranteed). 2. The leased building has a cost of $4,200,000 and was purchased for cash on January 1, 2020. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $275,000 per year and are made at the beginning of the year. 5. Sandhill has an incremental borrowing rate of 6%, and the rate implicit in the lease is unknown to Sandhill. 6. Both the lessor and the lessee are on a calendar-year basis. Prepare the journal entries that Teal Mountain should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Debit Credit Date 1/1/20 ~ Account Titles and Explanation Buildings 4200000 Cash 4200000 (To record cost of the building) 1/1/20v Cash 275000 Unearned Lease Revenue 275000 (To record receipt of lease payment) 12/31/20 Unearned Lease Revenue 275000 Lease Liability 275000 (To record the recognition of the revenue each period) 12/31/20v Depreciation Expense 94000 Accumulated Depreciation-Leased Building 94000 (To record depreciation expense on the leased asset) Prepare the journal entries that Sandhill should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Debit Credit Date 1/1/20 v Account Titles and Explanation Leased Buildings Cash (To record the lease) 1/1/20 v Lease Expense Cash (To record lease payment) 12/31/20 V Depreciation Expense Accumulated Depreciation-Buildings Cash X Your answer is incorrect. If Sandhill paid $40,000 to a real estate broker on January 1, 2020, as a fee for finding the lessor, what is the initial measurement of the right-of-use asset? Right-of-use asset $ 2367594