On December 31, 2019, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $7,909 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrocks incremental borrowing rate is 8%, and the lessors implicit rate is unknown.

a) Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.)

Present value of the lease payments

$enter the Present value of the lease payments in dollars

b)Prepare all necessary journal entries for Shamrock for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
	Right-of-Use Asset	fill in blanks vvv>>	enter a credit amount
	Lease Liability	enter a debit amount	enter a credit amount
	(To record the lease)
	Lease Liability	enter a debit amount	enter a credit amount
	Cash	enter a debit amount	enter a credit amount
	(To record first lease payment)
choose a transaction date 12/31/1912/31/20	Amortization Expense	enter a debit amount	enter a credit amount
	Right-of-Use Asset	enter a debit amount	enter a credit amount
	(To record amortization of the right-of-use asset)
choose a transaction date 12/31/1912/31/20	Interest Expense	enter a debit amount	enter a credit amount
	Lease Liability	enter a debit amount	enter a credit amount
	Cash	enter a debit amount	enter a credit amount
	(To record interest expense)