Use the information for Regina Corporation from BE20.16. Assume instead that the residual value is not guaranteed. Prepare Regina’s May 29, 2020 journal entries. Round to the nearest dollar. 

Data From BE20.16.

Regina Corporation, which uses ASPE, manufactures replicators. On May 29, 2020, it leased to Barnes Limited a replicator that cost $265,000 to manufacture and usually sells for $410,000. The lease agreement covers the replicator’s five-year useful life and requires five equal annual rentals of $95,930 each, beginning May 29, 2020. The equipment reverts to Regina at the end of the lease, at which time it is expected that the replicator will have a residual value of $40,000, which has been guaranteed by Barnes, the lessee. An interest rate of 12% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs.