On January 1, 2017, Sarasota Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Sarasota to make annual payments of $7,924 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Sarasota uses the straight-line method of depreciation for all of its plant assets. Sarasotas incremental borrowing rate is 10%, and the lessors implicit rate is unknown.

Please show me what I am doing wrong

Part 1 x Your answer is incorrect. Compute the present value of the minimum lease payments. (Round present value factor calculations to The present value of the minimum lease payments $ 37962.19 Calculation of PV of minimum lease payments 7,924 10% annual lease payment terms = n = r= interest rate annual lease payment annuity factor 1+(1-((1+r)^(n-1))}/ 7924 4.790786769 PV = 7924*4.790787 37962.19 Part 2 Prepare all necessary journal entries for Sarasota for this lease through January 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not in to decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit (To record the lease.) (To record first payment.) (To record depreciation.) (To record interest.) 1/1/18 (To record second payament.)