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LUS kleso, Intermediate Accounting, 170 CALCULATOR PRINTER VERSION NEXT RCES ark Problem 21-12 (Part Level Submission) Kingbird Industries and Oniole Inc. enter into an agreement that requires Oriole Inc. to build three diesel-electric engines to Kingbird's specifications. Upon completion of the engines, Kingbird has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2020, and requires annual rental payments of $391,965 each January 1, starting January 1, 2020 Kingbird's incremental borrowing rate is 8%. The implicit Interest rate used by Oriole and known to Kingbird is 6%. The total cost of building the three engines is $2,627,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Kingbird depreciates similar equipment on a straight-line basis. At the end of the lease, Kingbird assumes title to the engines. Collectibility of the lease payments is probable sc 020- Click here to view factor tables VU =yPLUS TRESOURCES home 21-12 Kieso, Intermediate Accounting, 17e Help Site Announcements CALCULATOR PRINTER VERSION BACK NEXT (b), (c) and (d) (b) Prepare the journal entry to record the transaction on January 1, 2020, on the books of Kingbird (the lessee). (Credir 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 for the amounts. Hound present value factor calculations to 5 decimal places, eg. 1.25124 and the inal answer to decimal places g. 58,971.) Account Tales and Explanation Debit Credit Screen 020-0....2 ults by Study Screen 020-0...3 (c) Prepare the yournal entry to record the transaction on January 1, 2020, on the books of Oriole (the lessor). (Credit account titles are automatically indented when amount is entered. De netIndent manually. It ne entry is required, select "No Entry for the account titles and enter for the amounts. Round answers to O decimal places.g. 58,971.) Screens 2020-0.41. Account Titles and Explanation Debit Credit Screens 020-0...56." (d) Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "We Entry for the accountries and enter for the amounts Screen She 020-0..22.44 Debit Credit Account Titles and Explanation Lessee Canuary 1, 2020) Sereen She 020-0...32.39 Lesso (anuary 1, 2020) Debit Credit Rita Roll 28