Show ALL your work and round all numbers to the nearest doll…
Show ALL your work and round all numbers to the nearest dollar.On January 1, 2021, Orvis Company leased manufacturing equipment from Giza Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Giza.Equal payments under the lease are $50,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter.Giza expects the residual value on December 31, 2024, to be $25,000. Negotiations led to Orvis guaranteeing a $35,000 residual value.The lease is classified as a finance and sales-type lease for the lessee and lessor, respectively. Orvis is aware that Giza used a 5% interest rate when calculating lease payments.PV of $1 (4 periods, 5%) is 0.8227, PV of annuity due (4 periods, 5%) is 3.72325, PV of ordinary annuity (4 periods, 5%) is 3.54595Show all your work and round to nearest dollar.Required:Prepare all the appropriate journal entry(s) for Orvis on January 1, 2021, related to the lease. Prepare the appropriate journal entry(s) for Giza on January 1, 2021, related to the lease.