On January 1, 2018, Naw Corporation leased a piece of machinery from Hoffherr Machinery's. The lease is a(n) 10 year, non-cancellable lease that requires lease payments of $5,000 due at the beginning of each year. The lease has been determined to be a capital lease because at least one of the classification criteria has been met. Naw Corporation needs to determine the present value of the lease payments so that they can record the asset and the liability at lease inception. Hoffherr Machinery's implicit rate of 10% is known to Naw Corporation. Complete the following from the perspective of Naw Corporation. Which of the following financial statement items is impacted in this transaction? Leases Obligation The problem is solving for: Present Value The calculation involves: An Annuity Due EXCEL Excel Formula PV ( Rate Nper Pmt FV Type Variables PV ( .1 10 -5000 0 1 ) Total 33795 Date of Delivery Accounts Debit Credit To record the inception of the lease asset 33795 asset 33795 To record the first lease payment asset 5000 cash 5000