On December 31, 2017, Black co. signed a 5-year, non - cancellable lease for a grinding machine. The terms of the lease called for Black co. to make annual payments of 89,550 at the beginning of each year, starting December 31, 2017. The machine has an estimated useful life of 6 years and a $3,000 residual value. The machine will be handed over to the lessor at the end of the lease term. Black co. uses the straight line method of depreciation for all of its assets. Black co.'s incremental rate is 5% (Present value of an annuity-due of 1 for 5 periods at 5% -4.54595.) Instructions: - 1. Compute the present value of the lease payments. (25 marks) 2. Prepare all necessary journal entries for Black co, for this lease through December 31, 2018 (75 marks)