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Date Account Titles and Explanation Debit Credit (To record lease liability) (To record lease payment) (To record interest expense) (To record amortization of the right-of-use asset) 2 Present Value of $1 TABLE 4 Present Value of an Ordinary Annuity of $1 PVA=i1(1+)1 TABLE 6 Present Value of an Annuity Due of $1 PVAD=21(1+i)n1(1+i) Sunland Co. leased machinery from Young, Inc, on January 1, 2025. The lease term was for 8 years, with equal annual rental payments of $5,800 at the beginning of each year. In addition, the lease provides an option to purchase the machinery at the end of the lease term for $2,500, which Sunland is reasonably certain it will exercise as it believes the fair value of the machinery will be at least $5,000. The machinery has a useful life of 10 years and a fair value of $38,000. The implicit rate of the lease is not known to Sunland. Sunland's incremental borrowing rate is 6%. Prepare Sunland's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal ploces as displayed in the foctor table provided and round final answers to 0 decimal places, eg. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Click here to view factor tables

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