There is a part $($d$)$ that asks this. Return to the original facts in the problem. Now suppose that, at the end of the lease term, Kimberly Clark took good care of the asset and Sandhill agrees that the fair value of the asset is actually $$10,000.$ Record the entry for Kimberly Clark at the end of the lease to return control of the storage building to Sandhill. $($assuming the accrual of interest on the lease liability has already been

made$).$ Current Attempt in Progress

Assume that on December $31,2024,$ Kimberly$-$Clark Corp. signs a $10-$year, non$-$cancelable lease agreement to lease a storage building from Sandhill Storage Company. The following information pertains to this lease agreement.

$1.$ The agreement requires equal rental payments of $\backslash (\backslash$$ $68,099\backslash )$ beginning on December $31,2024.$

$2.$ The fair value of the building on December $31,2024,$ is $\backslash (\backslash$$ $498,137\backslash ).$

$3.$ The building has an estimated economic life of $12$ years, a guaranteed residual value of $\backslash (\backslash$$ $10,000\backslash ),$ and an expected residual value of $\backslash (\backslash$$ $6,000\backslash ).$ Kimberly$-$Clark depreciates similar buildings on the straight$-$line method.

$4.$ The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

$5.$ Kimberly$-$Clark's incremental borrowing rate is $\backslash (8\backslash \%\backslash )$ per year. The lessor's implicit rate is not known by Kimberly$-$Clark.

Click here to view factor tables.

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

Assume that on December $31,2024,$ Kimberly$-$Clark Corp. signs a $10-$year, non$-$cancelable lease agreement to lease a storage building from Sandhill Storage Company. The following information pertains to this lease agreement.

$1.$ The agreement requires equal rental payments of $\backslash (\backslash$$ $68,099\backslash )$ beginning on December $31,2024.$

$2.$ The fair value of the building on December $31,2024,$ is $\backslash (\backslash$$ $498,137\backslash ).$

$3.$ The building has an estimated economic life of $12$ years, a guaranteed residual value of $\backslash (\backslash$$ $10,000\backslash ),$ and an expected residual value of $\backslash (\backslash$$ $6,000\backslash ).$ Kimberly$-$Clark depreciates similar buildings on the straight$-$line method.

$4.$ The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

$5.$ Kimberly$-$Clark's incremental borrowing rate is $\backslash (8\backslash \%\backslash )$ per year. The lessor's implicit rate is not known by Kimberly$-$Clark.

Click here to view factor tables.

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