LAPA Question 2 Larkspur Company leases an automobile with a fair value of $10,452 from John Simon Motors, Inc., on the following terms: 1. Noncancelable term of 50 months. 2. Rental of $240 per month (at end of each month). (The present value at 1% per month is $9.408.) 3. Estimated residual value after 50 months is $1,030. (The present value at 1% per month is $626) Larkspur Company guarantees the residual value of $1,030. 4. Estimated economic life of the automobile is 60 months. 5. Larkspur Company's incremental borrowing rate is 12% a year (1% a month). Simon's implicit rate is unknown What is the present value of the minimum lease payments? udy The present value of the minimum lease payments 10034 $ SHOW LIST OF ACCOUNTS LINK TO TEXE (c) Record the lease on Larkspur Company's books at the date of inception. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is ree the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Leased Equipment 10034 Lease ability 10014 (d) Record the first month's depreciation on Larkspur Company's books ( ame straight-ine). (Credit account titles are automatically indented when amount is not indes manually. If select "Ne Entry for the account title and enter for the amounts Round answers to decimal places 15.) Det Crest Account Titles and Explanation Deprecation Expense 100 165 Accumulated Depreciation Equipment (e) Record the first month's lease payment. (Credit account tities are automatically indented when amount is entered. Do not indentally. If no estry is require selectorestry for the ac o for the amounts, Round answers to decimal places, s. 15.) Account Titles and Explanation Debit Crede Interest Expense 245 Cash