On January 1, 2020, Bensen Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $ 1,000, while the expected residual value at the end of the lease is $ 5,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2020. 3. The fair value of the equipment on January 1, 2020, is $ 150,000, and its cost is $ 120,000. 4. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis. 5. Bensen set the annual rental to ensure a 5% rate of return. Flynn's incremental borrowing rate is 6%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments by the lessor is probable. Both the lessor and the lessee's accounting periods end on December 31. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) * Your answer is incorrect. Calculate the amount of the annual rental payment. (Round answer to 0 decimal places, e.g. 5,275.) Annual rental payment $ 27,445 Prepare all the necessary journal entries for Bensen for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) ate Account Titles and Explanation Debit Credit 0 Lease Receivable 150,000 Cost of Goods Sold 116,269 Sales Revenue 146,269 Inventory 120,000 (To record the lease) Cash 27,445 Lease Receivable 27,445 (To record lease payment) 31/20 Lease Receivable 6,128 Interest Revenue 6,128 Suppose the collectibility of the lease payments was not probable for Bensen. Prepare the necessary journal entry for the company in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1/1/20 Cash 26,317 Deposit Liability 26,317 Prepare all the necessary journal entries for Flynn for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) late Account Titles and Explanation Debit Credit 20 Right-of-Use Asset 150,000 Lease Liability 150,000 (To record the lease) 20 Lease Liability 26,472 Cash 26,472 (To record the lease payment) 1/20 > Amortization Expense 25,000 Right-of-Use Asset 25,000 (To record amortization of the right-of-use asset) 1/20