On January 1, 2017, Bramble Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Bramble to make annual payments of $7,909 at the beginning of each year, starting January 1, 2017. 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. Bramble uses the straight-line method of depreciation for all of its plant assets. Brambles incremental borrowing rate is 11%, and the lessors implicit rate is unknown.

Compute the present value of the minimum lease payments. Prepare all necessary journal entries for Bramble for this lease through January 1, 2018.