Completion Status: Moving to the next question prevents changes to this answer. Question 2 Question 2 of 3 > 10 points Save Answer P&Q Inc. leased an exploring machine to leasee VW Company. The noncancelable lease requires lease payments of $7,000 per year, payable in advance, over a five-year period. There is a bargain purchase option of $5,000 for VW. P&Q's implicit interest rate (known to VW) is 11 percent. The lease term begins on January 1, 2019. The machine's economic life is 9 years. The machine's book value is $30,000 and fair value $32,000. The collectability of the lease payments is probable for the lessor. (Present value of an ordinary annuity of 1 for 5 periods at 11% is 3.6959, of an annuity due of 1 for 5 periods at 11% is 4.10245. Present value of 1 for 5 periods at 11% is 0.59345). Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thousand is 1,000, not 1000. No $ sign. No positive or negative sign. 2. If no entry is required, write N/A. 3. Only use the following accounts: ROU asset, Lease liability, Depreciation expense, Interest expense, Cash, CGS, Lease receivable, Inventory, Sales revenue, Interest revenue. 4. Copy account names accurately to receive credits, names are not case sensitive. 1. Provide the journal entries of the lessee through January 1, 2020. 1/1/2019 journal entries: Account Account Dr. 1/1/2019 journal entries: Account Account Account Account 12/31/2019 journal entries: Account Account Account Account Dr. Dr. Cr. Cr. Dr. Dr. Cr. Cr. 1/1/2020 journal entries: Account Account Dr. Cr. 2. Provide the journal entries of the lessor through January 1, 2020. 1/1/2019 journal entries: Account Account Account Account Account Account Dr. Dr. Dr. Cr. Question Completion Status: Account Account Account Account 12/31/2019 journal entries: Account Account 1/1/2020 journal entries: Account Account Dr. Dr. Cr. Cr. Ju Dr. Cr. Dr