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On January 1, 2020, Marin Co. leased a building to Cullumber Inc. The relevant information related to the lease is as follows. 1. 2 3. The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $ 2,900,000 lunguaranteed). The leased building has a cost of $3,400,000 and was purchased for cash on January 1, 2020 The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. Lease payments are $255.000 per year and are made at the beginning of the year. Cullumber has an incremental borrowing rate of 8%, and the rate implicit in the lease is unknown to Cullumber. Both the lessor and the lessee are on a calendar year basis. 4. 5. 6. Prepare the journal entries that Marin should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 (To record cost of the building) 11/20 (To record receipt of lease payment) 1/1/20 (To record the recognition of the revenue each period) 1/1/20 (To record depreciation expense on the leased asset) Prepare the journal entries that Cullumber should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to decimal places, es. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset Lease Liability (To record the lease) 1/1/20 Lease Liability Cash (To record lease payment) 12/31/20 Lease Expense Right-of-Use Asset Lease Liability if Cullumber paid $ 35,000 to a real estate broker on January 1, 2020, as a fee for finding the lessor, what is the initial measurement of the right-of-use asset? Right-of-use asset $

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