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Jenkins Manufacturing Company leased a piece of nonspecialized machinery for use in its operations from Perry Leasing on January 1. 'Click the icon to view

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Jenkins Manufacturing Company leased a piece of nonspecialized machinery for use in its operations from Perry Leasing on January 1. 'Click the icon to view additional information.) Prepare Perry Leasing's journal entries at the commencement of the lease and at the end of the first year. Begin by classifying the lease agreement for Perry Leasing. Identify any of the Group I criteria that Perry Leasing meets. (Select all that apply.) Grour /Criteria: 1. The lease transfers ownership to the lessee at the end of the lease term. 2. The lessee is given an option to purchase the asset that the lessee is reasonably certain to exercise. 3. The lease term is for a major part of the economic life of the asset. 4. The present value of the sum of the lease payments and any residual value the lessee guarantees to pay (that is not otherwise included in the lease payment) is equal to substantially all of the assel's fair value. 5. The leased asset is of a specialized nature. 6. The lease does not meet any Group I lease criteria. This is a(n) lease for the lessor (Perry Leasing) because of the Group I criteria is(are) met. Prepare the entry for Perry at the commencement of the lease on January 1 . Exclude the first annual lease payment from this entry. We will record that payment in the next step. (Record debits first, then credits. Exclude explanations from any journal entries.) Record Perry's interest accrual related to the lease on December 31. (Round amounts to the nearest whole dollar. Record debits first, explanations from any journal entries.) More info The 10-year lease requires lease payments of $4,000 due on January 1 of each year. The machinery is estimated to have a 10 -year life, is depreciated on the straight-line method, and will have no residual value at the end of the lease term. The present value of the lease payments using 11.2% and the asset's fair value on the date the lease is signed both equal $25,977. Perry paid fair value to acquire the equipment the day before lease commencement. The lessor's implicit rate of 11.2% is known to Jenkins. Collection of all lease payments is reasonably assured

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