Ivanhoe Company, a machinery dealer, leased a machine to Oriole Corporation on January 1, 2025. The...

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Ivanhoe Company, a machinery dealer, leased a machine to Oriole Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $31,300 at the beginning of each year. The first payment is received on January 1, 2025. Ivanhoe had purchased the machine during 2024 for $170,000. Collectibility of lease payments by Ivanhoe is probable. Ivanhoe set the annual rental to ensure a 7% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Ivanhoe at the termination of the lease. Assume that Oriole Corporation does not know the rate implicit in the lease used by Ivanhoe, and Oriole's incremental borrowing rate is 9%. In addition, assume that Oriole incurs initial direct costs of $13,000. Click here to view factor tables. (a) (b) Prepare all necessary journal entries for Oriole for 2025. (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 O for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.) Date 1/1/25 Account Titles and Explanation Debit 1/1/25 (To record the lease) 12/31/25 + (To record the first lease payment) 12/31/25 (To record interest expense) (To record amortization of the right-of-use asset) Ivanhoe Company, a machinery dealer, leased a machine to Oriole Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $31,300 at the beginning of each year. The first payment is received on January 1, 2025. Ivanhoe had purchased the machine during 2024 for $170,000. Collectibility of lease payments by Ivanhoe is probable. Ivanhoe set the annual rental to ensure a 7% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Ivanhoe at the termination of the lease. Assume that Oriole Corporation does not know the rate implicit in the lease used by Ivanhoe, and Oriole's incremental borrowing rate is 9%. In addition, assume that Oriole incurs initial direct costs of $13,000. Click here to view factor tables. (a) (b) Prepare all necessary journal entries for Oriole for 2025. (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 O for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.) Date 1/1/25 Account Titles and Explanation Debit 1/1/25 (To record the lease) 12/31/25 + (To record the first lease payment) 12/31/25 (To record interest expense) (To record amortization of the right-of-use asset)