Wesley Company leased smelting furnaces from Tru Red Incorporated on January 1, 2023. The terms of the lease call for semi-annual payments due January 1 and July 1. The first payment was due upon signing the lease contract. The lease term is 4 years and requires payments of $35,000. The economic life of the furnaces is 4 years and cost Tru Red $80,000 to manufacture. Tru Reds implicit annual interest rate is 14%.

A. Prepare all of Tru Reds 2023 journal entries related to this lease.

B. What is reported on Tru Reds 2023 Balance Sheet related to this lease? (Be specific)

C. What is reported on Tru Reds 2023 Income Statement? (Be specific)