Marin Company leases an automobile with a fair value of $16,513 from John Simon Motors, Inc., on the following terms:

1.		Non-cancelable term of 50 months.
2.		Rental of $340 per month (at the beginning of each month). (The present value at 0.5% per month is $15,084.)
3.		Marin guarantees a residual value of $1,420 (the present value at 0.5% per month is $1,107). Delaney expects the probable residual value to be $1,420 at the end of the lease term.
4.		Estimated economic life of the automobile is 60 months.
A.		5. Marins incremental borrowing rate is 6% a year (0.5% a month). Simons implicit rate is unknown. What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimal places, e.g. 5,275.) Present value of the lease payments B. Based on the original fact pattern, record the lease on Marins books at the date of commencement. C.Record the second months lease payment.

D. Record the first months amortization on Marins books (assume straight-line).

E. Suppose that instead of $1,420, Marin expects the residual value to be only $500 (the guaranteed amount is still $1,420). How does the calculation of the present value of the lease payments change from part (b)