David Inc. leases equipment to its customers undernoncancellable leases. On Janu

David Inc. leases equipment to its customers undernoncancellable leases. On January 1 2009 David leased equipmentcosting $200000 to Goliath Co. terms 9 years. The rental cost was$22000 payable in advance semiannually plus $1000 executorycost. The equipment had an estimated life of 15 years and sold for$266513 with an estimated unguaranteed residual value of $40000.The implicit interest rate is 12%. Collectibility of the leasepayments is reasonably certain and no uncertainties exist relativeto unreimbursable lessor costsNote: Present value calculations are:PV residual value 18 periods at 6%: $40000 x .3503 = $14012PV minimum lease payments: $22000 X 11.4773 = $252501Instructions:Prepare all journal entries for 1/1 7/1 & 12/31 of 2009 onDavids and Goliaths books. Round all calculations to the nearestdollar. Use straight-line depreciation.