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Assume that IBM leased equipment that was carried at a cost of $$174,000$ to Sandhill Company. The term of the lease is $5$ years beginning December $31,2024,$ with equal rental payments of $$30,400$ beginning December $31,2024.$ The fair value of the equipment at commencement of the lease is $$131,089.$ The equipment has a useful life of $5$ years with no salvage value. The lease has an implicit interest rate of $8\%,$ no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable.

Prepare IBM's December $31,2024,$ journal entries at commencement of the lease. $($List all debit entries before credit entries. 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 $0$ for the amounts. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answers to $0$ decimal places e$.$g$.5,275.)$

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Date

December $31,2024$

Account Titles and Explanation

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$q,$

$q,$

$($To record the lease$)$

December $31,2024$

$($To record receipt of lease payme

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List of Accounts