unland Company leases a building to Walsh, Inc on January 1, 2020 The following facts pertain to the lease agreement 1 The lease term is 5 years, with equal annual rental payments of $3,666 at the beginning of each year 2 Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature 3 The building has a fair value of $17,200, a book value to Sunland of $10,200, and a useful life of 6 years 4 At the end of the lease term, Sunland and Walsh expect there to be an unguaranteed residual value of $2,550 5 Sunland wants to earn a return of 9 on the lease, and collectibility of the payments is probable This rate is known by Walsh Using the original facts of the lease, show the journal entries to be made by both Sunland and Walsh in 2020 (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to o decimal places, e g 5,275 Credit account titles are automatically indented when the amount is entered Do not indent manually ) Sunland Journal Entries Date Account Titles and Explanation Debit Credit (To record the lease) V (To record lease payment) Walsh's Journal Entries Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment) (To record interest expense) (To record amortization of the right of use asset)

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unland Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is

unland Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement.

1.		The lease term is 5 years, with equal annual rental payments of $3,666 at the beginning of each year.
2.		Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature.
3.		The building has a fair value of $17,200, a book value to Sunland of $10,200, and a useful life of 6 years.
4.		At the end of the lease term, Sunland and Walsh expect there to be an unguaranteed residual value of $2,550.
5.		Sunland wants to earn a return of 9% on the lease, and collectibility of the payments is probable. This rate is known by Walsh.

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Using the original facts of the lease, show the journal entries to be made by both Sunland and Walsh in 2020. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to o decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Sunland Journal Entries Date Account Titles and Explanation Debit Credit (To record the lease) V (To record lease payment) Walsh's Journal Entries Date Account Titles and Explanation Debit Credit (To record the lease) (To record lease payment) (To record interest expense) (To record amortization of the right-of-use asset)