Exercise 21A-3 a-g Larkspur Company leases an automobile with a fair value of $10,844 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $220 per month (at the beginning of each month). (The present value at 0.5% per month is $9,760.) 3. Larkspur guarantees a residual value of $1,120 (the present value at 0.5% per month is $873). Larkspur expects the probable residual value to be $1,120 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Larkspur's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Based on the original fact pattern, record the lease on Larkspur's books at the date of commencement. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Credit Right-of-Use Asset Right-of-Use Asset 9760 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Suppose that instead of $1,120, Larkspur expects the residual value to be only 5500 (the guaranteed amount is still $1,120). How does the calculation of the present value of the lease payments change from part (b)? (Round answer to 0 decimal places, e.g. 5,275.) PV of lease payments 10844 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS