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Complete the following workout problems with journal entries, showing your work for full credit. Present value tables are available in your textbook, but may also

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Complete the following workout problems with journal entries, showing your work for full credit. Present value tables are available in your textbook, but may also be found easily online. Financial calculators are permitted, however, you must list the inputs you used in your calculation for full credit. 2. (24 points) Luther Corp has identified a factory building that it wishes to acquire to launch a new product line. The factory has a current estimated fair market value of $540,000 and has an estimated remaining economic life of 20 years. Luther's incremental borrowing rate is 8%. The current owner has presented Luther with a couple different options to acquire the factory: a. Luther can purchase the factory directly from the owner by signing a 10-year zero-interest-bearing note with a face value of $1,000,000. b. Luther can lease the factory building from the current owner over a 12 year term. The lease contract includes annual payments of $60,000 at the beginning of each year. Under this lease, it is determined that the 12 year lease term would represent a major part of the factory's remaining economic life. For each of the two potential financing options, prepare the journal entries for the first year related to both the factory and the related liability

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