On December 31, 2019,WindsorCorporation signed a5-year, non-cancelable lease for a machine. The terms of the lease called forWindsorto make annual payments of $9,353at the beginning of each year, starting December 31, 2019. The machine has an estimated useful life of6years and a $4,800unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term.Windsoruses the straight-line method of depreciation for all of its plant assets.Windsor's incremental borrowing rate is15%, and the lessor's implicit rate is unknown.

On December 31, 2019, Windsor Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Windsor to make annual payments of $9,353 at the beginning of each year, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,800 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Windsor uses the straight-line method of depreciation for all of its plant assets. Windsor's incremental borrowing rate is 15%, and the lessor's implicit rate is unknown. Click here to view factor tables. What type of lease is this? Thisisa/an nance v 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 nal answer to 0 decimal places as. 5,275.) Present value of the lease payments $ eTextbook and Media List of Accounts Prepare all necessary journal entries for Windsor 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 12/3 1/19 V Right-of-Use Asset Lease Liability (To record the lease) 12/31/19 V Lease Liability Cash (To record rst lease payment) 12/31/20 V Interest Expense Lease Liability (To record amortization of the right-of-use asset) 12/31/20 V Amortization Expense (To record interest expense)