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Macinski Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $ 70,000 and fair value of $ 95,000. Under the 3-year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2020. Macinski expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. Prepare the journal entry at commencement of the lease for Macinski. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20 Lease Receivable 95.000 Cost of Goods Sold 25,000 Sales Revenue 70,000 Inventory Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Macinski's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial directs costs of $ 10,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset 93,000 Lease Liability 92,633 Cash 10,000

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