Prepare Sheridans' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Sheridan. (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 0 decimal places e.g. 5,275.)
Sheridan Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $37,100 each, beginning December 31, 2019. In addition, Sheridan guarantees the lessor a residual value of $20,900 at the end of the lease. However, Sheridan believes it is probable that the expected residual value at the end of the lease term will be $10,450. The equipment has a useful life of 6 years.
Prepare Sheridans' December 31, 2019,
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