Advanced Accounting II Chapter 21 - Leases Problem 1. On January 1, 2019, Wilcox Inc. leased equipment from Zed Co. for use in the engineering The noncancelable lease is for 6 years with an unguaranteed residual value of $5.000 and the estimated economie life of the leased equipment is 10 years. The lease does not contain automatic title transfer or a bargam pum option Lease payments are $9,000 per year, payable ench December 31. The incremental borrowing rate for WHICON is 8 percent and Zed's implicit interest rate (known by Wilcox) is 6 percent. Wilcox uses straight-line depreciation for the equipment. To Zed, the equipment had a cost of $44,000 and fair value of $48,000. The collectability of the lease payments is probable for the lessor. Instructions Provide the necessary journal entries to record the transactions for the lessee and lessor for the period January 2019 through December 31, 2020