CALCULATOR BACK Problem 21-1 whispering Leasing Company agrees to lease machinery to Metock Corporation on January 1, 2017. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. | The cost of the machinery is $523,000, and the fair value of the asset on January , 2017, is ssa,ooo. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $108,000. Metlock depreciates all of its equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2017. 5. The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor 6 whispering desires a 10% rate of return on its investments. Metock's incremental borrowing rate is 11%, and the lessor's imp dt rate is unknown Assume the accounting period ends on December 31.) Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places,e.g. 1.25124 and the final answer to o decimal places e.g. 58,971.) Annual rental payment SHO N ST OF ACCOUNTS INK TO TEXT LINK TO TEXT 945 PM 17/02/2019 2st24 and the final answer to o value of the minimum lease payments (Round present value factor calculations to S decimal places, e g decimal places e.g.58,971.) Present value of minimum lease payments ST OF ACCOUNTS Prepare the journal entries Metlock would make in 2017 and 2018 related to the lease arrangement. (Credit account titles are automatically indented when amount is entered. Do not indent manualy. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit To record the lease.) (To record lease payment.) 9:45 PM (To record depreciation.) (To record interest.) (To record depreciation.) To record interest.) Prepare the journal entries Whispering would make in 2017 and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit (To record the lease.) To record lease payment.) e 946 PM 7/02/2019 CALCULATOR FULL SCREEN PR (To record lease payment.) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Question Attempts: 0 of 3 used SAVE