Announcements CALCULATOR 4 BACK PRINTER VERSION NEXT Ivanhoe Co,leased machinery from Young, Inc. on January 1,...

Announcements CALCULATOR 4 BACK PRINTER VERSION NEXT Ivanhoe Co,leased machinery from Young, Inc. on January 1, 2017. The lease term was for 8 years, with equal annual rental payments of $5,700 at the beginning of each year. In addition, the lease provides an option to purchase the machinery at the end of the lease term for $3,000, which Ivanhoe is reasonably certain it will exercise as it believes the fair value of the machinery will be at least $6,000. The machinery has a useful life of 10 years and a fair value of $35,000. The implicit rate of the lease is not known to Ivanhoe, Ivanhoe's incremental borrowing rate is 7% Prepare Ivanhoe's 2017 journal entries. (Credit account titles are automatically indented when the 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 decimal places, 0.3, 5,275.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit 1/1/17 Right-of-Use Asset 35000 Lease Liability 35000 (To record lease ability) 1/1/17 Lease Liability 5700 Cash 5700 (To record lease payment) 12/31/17 Interest Expense 2051 Lease Liability 2051 (To record interest expense) 12/31/17 Amortization Expense 4375 Right-of-Use Asset 43751