On January 1, 2017, Flounder Corporation signed a 3-year noncancelable lease for several computers. The terms of the lease called for Flounder to make annual payments of $4,500 at the beginning of each year, starting January 1, 2017. The computers have an estimated useful life of 3 years and a $550 unguaranteed residual value. The computers revert back to the lessor at the end of the lease term. Flounder uses the straight-line method of depreciation for all of its property, plant, and equipment. Flounder’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown.

Compute the present value of the minimum lease payments.

Enter journal entries for Flounder