Exercise 21-02 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 $8,199 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 $5,200 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. Your answer is correct. . What type of lease is this? This is a/an finance lease. SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Your answer is correct. 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 37960.55 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. . 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 O decimal places e.g. 5,275.) Debit Credit 37960.55 37960.55 Date Account Titles and Explanation 12/31/19 Right-of-Use Asse Lease Liability (To record the lease) ( 12/31/19 Lease Liability Cash (To record first lease payment) ( 12/31/20 Amortization Expe 8199 81991 7592.11 7592.11 Right-of-Use AS (To record amortization of the right-of-use asset) -) 12/31/20 Right-of-Use Asse 37960.55 Lease Liability 8199 7592.11 Cash (To record interest expense)