weet Leasing Company agrees to lease equipment to Pharoah Corporation on January 1,2025. The following information relates to he lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $502,000, and the fair value of the asset on January 1,2025, is $739,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $45,000. Pharoah estimates that the expected residual value at the end of the lease term will be $45,000. Pharoah amortizes all of its leased equipment on astraight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1,2025. 5. The collectibility of the lease payments is probable. 6. Sweet desires a 11% rate of return on its investments. Pharoah's incremental borrowing rate is 12%, and the lessor's implicit rate is unknown. (Assume the accounting period ends on December 31.) Click here to view factor tables. Discuss the nature of this lease for both the lessee and the lessor. This is a for Pharoah. This is a for Sweet. Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, es. 1.25124 and the final answer to 0 decimal places es. 58,972 .) Annual rental payment $ eTextbook and Media List of Accounts Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal ploces, es. 1.25124 and the final answer to 0 decimal places es. 58,972 .) Present value of minimum lease payments Prepare the journai entries Pharoah would make in 2025 and 2026 related to the iease arrangement. ICredit occount titles are outomaticolly indented when amount is entered. Do not indent manualk. If no entry is required select Nio Entry' for the account titles and enter O for the anounts Round anmers to 0 decimal alaces e. 58.972 . Recovd loumal entries in the onder aresented in the brobles Lit Prepare the journal entries Sweet would make in 2025 and 2026 related to the iesse arrangement, (Crenft account tilles are all debit entries before credit entries) eTexthook and Medis. Suppose Pharoph experts the residual value at the end of the le aue inrm to be $35,000 but ail suar antees a revifua of $45,000. Lease ilatility $