Wildhorse Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $40,100 each, beginning December 31, 2019. In addition, Wildhorse guarantees the lessor a residual value of $20,300 at the end of the lease. However, Wildhorse believes it is probable that the expected residual value at the end of the lease term will be $10,150. The equipment has a useful life of 6 years. Prepare Wild Horses' December 31, 2019, journal entries assuming the implicit rate of the lease is 11% and this is known to Wildhorse
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