On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Marin to make annual payments of $8,566 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Marin uses the straight-line method of depreciation for all of its plant assets. Marin’s incremental borrowing rate is 4%, and the lessor’s implicit rate is unknown. Click here to view factor tables. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf a) Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.) Present value of the lease payments $enter the Present value of the lease payments in dollars (b) Prepare all necessary journal entries for Marin for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record the lease enter a debit amount enter a credit amount enter an account title to record the lease enter a debit amount enter a credit amount (To record the lease) choose a transaction date enter an account title to record first lease payment enter a debit amount enter a credit amount enter an account title to record first lease payment enter a debit amount enter a credit amount (To record first lease payment) choose a transaction date enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount (To record amortization of the right-of-use asset) choose a transaction date enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount (To record interest expense)

On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Marin to make annual payments of $8,566 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Marin uses the straight-line method of depreciation for all of its plant assets. Marin’s incremental borrowing rate is 4%, and the lessor’s implicit rate is unknown. Click here to view factor tables. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf a) Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.) Present value of the lease payments $enter the Present value of the lease payments in dollars (b) Prepare all necessary journal entries for Marin for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record the lease enter a debit amount enter a credit amount enter an account title to record the lease enter a debit amount enter a credit amount (To record the lease) choose a transaction date enter an account title to record first lease payment enter a debit amount enter a credit amount enter an account title to record first lease payment enter a debit amount enter a credit amount (To record first lease payment) choose a transaction date enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount (To record amortization of the right-of-use asset) choose a transaction date enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount (To record interest expense)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

a)

Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.)

Present value of the lease payments

$enter the Present value of the lease payments in dollars

(b)

Prepare all necessary journal entries for Marin for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date


enter an account title to record the lease	enter a debit amount	enter a credit amount
enter an account title to record the lease	enter a debit amount	enter a credit amount
(To record the lease)


enter an account title to record first lease payment	enter a debit amount	enter a credit amount
enter an account title to record first lease payment	enter a debit amount	enter a credit amount
(To record first lease payment)

enter an account title to record amortization of the right-of-use asset

enter a debit amount

enter a credit amount

enter an account title to record amortization of the right-of-use asset

enter a debit amount

enter a credit amount

(To record amortization of the right-of-use asset)

choose a transaction date

enter an account title to record interest expense

enter a debit amount

enter a credit amount

enter an account title to record interest expense

enter a debit amount

enter a credit amount

enter an account title to record interest expense

enter a debit amount

enter a credit amount

(To record interest expense)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.