(Lessee Entries for Sales Type Capital Lease) On January 1, 2018, ICO Company contracts to lease equipment for 5 years, agreeing to make annual payments of $115,413 at the beginning of each year, starting January 1, 2018. The asset is to be depreciated on a double-declining-balance basis. The lease will be amortized using the effective interest method. Crowthers incremental borrowing rate is 12%, and the lessors implicit rate in the lease is 10%, which is known by Crowther. Title to the equipment transfers to Crowther when the lease expires. The asset has an estimated useful life of 5 years and no residual value. (Round all numbers to the nearest dollar.) - Note: use Annuity Due for calculation of P.V.

18) Compute the present value of the minimum lease payments:

P.V. of minimum lease payments Calculations:

B) Prepare the journal entry or entries that should be recorded on January 1, 2012, by ISO Company (note: two JEs needed one to record the lease and the other to record the first payment correct accounts must be used):

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C) Prepare the journal entries to record the accrual of interest at December 31^st and also to record depreciation for the year 2012 (two journals needed)

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