PLEASE ONLY ANSWER IF YOU CAN DO SO CORRECTLY

PLEASE ALSO CALCULATE THE VALUE OF THE LEASE LIABILITY TO THE LEASEE

Compute the value of the lease liability to the lessee. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the

final answer to $0$ decimal places e$.$g$.58,972.)$

Present value of minimum lease payments

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List of Accounts

Attempts: $1$ of $5$ used

$($d$)$

Your answer is partially correct. Prepare the journal entries Sage would make in $2025$ and $2026$ related to the lease arrangement. $($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$.58,972.$ Record journal entries in the order presented in the problem. List

all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit

Right$-$of$-$Use Asset

Lease Liability

$($To record the lease.$)$

$[]$

$($To record lease payment.$)$

Amortization Expense

$($To record amortization.$)$

$($To record interest.$)$

Lease Liability TO$/$OL $-$ ACC$-371$ Topic $5$ Assignment

Question $8$ of $8$

$\frac{2\mathrm{.}12}{5}$

$($To record interest.$)$

$1/1/26$

List of Accounts

Attempts: $1$ of $5$ usedPrepare the journal entries Headland would make in $2025$ and $2026$ related to the lease arrangement. $($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$.58,972.$ Record journal entries in the order presented in the problem. List

all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit

$($To record the lease.$)$

$($To record lease payment.$)$

Headland Leasing Company agrees to lease equipment to Sage Corporation on January $1,2025.$ The following information relates to

the lease agreement.

The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

The cost of the machinery is $$475,000,$ and the fair value of the asset on January $1,2025,$ is $$681,000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$50,000.$ Sage estimates

that the expected residual value at the end of the lease term will be $$50,000.$ Sage amortizes all of its leased equipment on a

straight$-$line basis.

The lease agreement requires equal annual rental payments, beginning on January $1,2025.$

The collectibility of the lease payments is probable.

Headland desires a $9\%$ rate of return on its investments. Sage's incremental borrowing rate is $10\%,$ and the lessor's implicit

rate is unknown.

$($Assume the accounting period ends on December $31.)$

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$($a$)$