On December 31, 2019,MetlockCorporation signed a5-year, non-cancelable lease for a machine. The terms of the lease called forMetlockto make annual payments of $8,176at the beginning of each year, starting December 31, 2019. The machine has an estimated useful life of6years and a $5,000unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term.Metlockuses the straight-line method of depreciation for all of its plant assets.Metlock's incremental borrowing rate is8%, and the lessor's implicit rate is unknown.

What type of lease is this? This is a/an lease. eTextbook and Media List of Accounts 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 O decimal places e.g. 5,275.) Present value of the lease payments $Prepare all necessary journal entries for Metlock 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 e3. 5,275.) Date Account Titles and Explanation Debit Credit 1V (To record the lease) 1V (To record rst lease payment) 1V (To record amortization of the right-of-use asset) 1D (To record interest expense)