Exercise 21-4 Your answer is partially correct. Try again. Vaughn Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Bramble Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Bramble Company has the option to purchase the equipment for $14,900 upon termination of the lease. 2. The equipment has a cost and fair value of $175,000 to Vaughn Leasing Company. The useful economic life is 2 years, with a salvage value of $14,900. 3. Bramble Company is required to pay $4,700 each year to the lessor for executory costs. 4. Vaughn Leasing Company desires to earn a return of 8% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. Click here to view factor tables (a) Prepare the journal entries on the books of Vaughn Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018. (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 present value factor calculations to 5 decimal places, e.g. 0.527552 and the final answers to o decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit T 1/1/17 | Lease Receivable 175000 Equipment 175000 7 |Cash Executory Costs Payable 4700 Interest Revenue Lease Receivable cash Executory Costs Payable Interest Revenue Lease Receivable