View Policies Current Attempt in Progress Sheffield Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $61,020 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Sheffield's incremental borrowing rate is 9% Sheffield is unaware of the rate being used by the lessor. At the end of the lease, Sheffield has the option to buy the equipment for $5.000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value, Sheffield uses the straight-line method of depreciation on similar owned equipment. Click here to view factor tables. Prepare the journal entries, that Sheffield should record on December 31, 2020. (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 for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to o decimal places, e-8.58,971.) Debit Account Titles and Explanation Date Credit Prepare the journal entries, that Sheffield should record on December 31, 2020. (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 for the amounts. Round present value factor calculations to 5 decimal places, 6. 1.25124 and the final answers to decimal places, s. 58,971.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record leased asset and related liability) (To record the first rental payment.) e Textbook and Media List of Accounts Prepare the journal entries, that Sheffield should record on December 31, 2021. (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 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2021 To record amortization) (To record annual payment on lease liability) e Textbook and Media Prepare the journal entries, that Sheffield should record on December 31, 2022. (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 for the amounts. Round answers to decimal places es. 58,971.) Date Account Titles and Explanation Debit Credit December 31, 2022 (To record annual amortization on leased assets.) (To record annual payment on lease bability) e Textbook and Media What amounts would appear on Shefbeld's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to decimal places, 58,971.) SHEFFIELD STEEL COMPANY Balance Sheet Assets Liabilities Textbook and Media