On December 31, 2019, Tamarisk Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Tamarisk to make annual payments of $7,880 at the beginning of each year, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $5,000 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Tamarisk uses the straight-line method of depreciation for all of its plant assets. Tamarisk's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Click here to view factor tables. Your answer is correct. What type of lease is this? This is a/an finance lease. e Textbook and Media X Your answer is incorrect. 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 $ 35017 e Textbook and Media List of Accounts Prepare all necessary journal entries for Tamarisk 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 /31/19 Machinery 35017 35017 Lease Liability (To record the lease) Lease Liability /31/19 7880 Cash 7880 (To record first lease payment) /31/20 Amortization Expense 7003 7003 Accumulated Depreciation-Right-of-Use Asset (To record amortization of the right-of-use asset) /31/20 Lease Liability 4895 Interest Expense 2985 Cash 7880 (To record interest expense)