On January $1,2025,$ Metlock Co$.$ leased a building to Ivanhoe Inc. The relevant information related to the lease is as follows.

The lease arrangement is for $10$ years. The building is expected to have a residual value at the end of the lease of $$3,000,000($unguaranteed$).$

The leased building has a cost of $$3,500,000$ and was purchased for cash on January $1,2025.$

The building is depreciated on a straight$-$line basis. Its estimated economic life is $50$ years with no salvage value.

Lease payments are $$270,000$ per year and are made at the beginning of the year.

Ivanhoe has an incremental borrowing rate of $9\%,$ and the rate implicit in the lease is unknown to Ivanhoe.

Both the lessor and the lessee are on a calendar$-$year basis.

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$($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

$($a$)$

$($b$)$

Your answer is partially correct.

Prepare the journal entries that Ivanhoe should make in $2025.($List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to $0$ decimal places, e$.$g$.5,275.$ Record journal entries in the order presented in the problem. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Date

Account Titles and Explanation

Debit

Credit

Right$-$of$-$Use Asset

Lease Liability

$($To record the lease$)$

Lease Liability

$270000$

$($To record lease payment$)$

$$

$q,$

$$

$$

$$

$$

$$

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