Exercise 21-03 (Part Level Submission) Shamrock Company leases an automobile with a fair value of $18,013 from John Simon Motors, Inc., on the following terms: 1. 2. 3. 4. 5. Non-cancelable term of 50 months. Rental of $370 per month (at the beginning of each month). Shamrock guarantees a residual value of $1,600. Delaney expects the probable residual value to be $1,600 at the end of the lease term. Estimated economic life of the automobile is 60 months. Shamrock's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. What is the nature of this lease to Shamrock? The nature of this lease is a/an Tinance lease SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. What is the present value of the lease payments to determine the lease liability? (Round answer to o decimal places, e.g. 5,275.) Present value of the lease payments 10382 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Attempts: 2 of 2 used (c) Your answer is partially correct. Try again. Based on the original fact pattern, record the lease on Shamrock's books at the date of commencement. (Credit account titles are automatically indented when amount is indent manually.) Account Titles and Explanation Debit Credit Leased Asset 16415 Lease Liability 16415 (d) Your answer is correct. Record the first month's lease payment (at commencement of the lease). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to o decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Lease Liability 370 T T Cash T 370 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT (e) Your answer is partially correct. Try again. Record the second month's lease payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Lease Liability 282 Tinterest Expense Cash 370 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT (1) Your answer is partially correct. Try again. Record the first month's amortization on Shamrock's books (assume straight-line). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25.) Account Titles and Explanation Debit Credit Amortization Expense 247 Right-of-Use Asset Attempts: 1 of 2 used