On January 1, 2018, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $836,368 and has an expected economic life of five years. Nevels expects the residual value at December 31, 2021, will be $112,000. Negotiations led to the lessee guaranteeing a $164,000 residual value. Equal payments under the lease are $212,000 and are due on December 31 of each year with the first payment being made on December 31, 2018. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2018, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2018, related to the lease.

1,107s04/ pels TABLE 1 Future Value of $1 FV $1 (1+ir n/I 1.0 % 2.0 % 1.5% 3.0 % 2.5% 4.0 % 3.5% 4.5% 5.0% 6.0 % 5.5% 8.0 % 7.0% 10.0 % 9,0% 12.0 % 11.0% 20.0 % 1 1.01000 1.01500 1.02000 1.02500 1.03000 1.03500 1.04000 1.04500 1.05000 1.05500 1.06000 1.07000 2 1.02010 1.03022 1.04040 1.05063 1.06090 1.07123 1.08160 1.09203 1.10250 1.11303 1.12360 1.14490 1,08000 1.09000 1.10000 1.11000 1.12000 1.20000 1.16640 1.18810 1.21000 1.23210 1.25440 1.44000 3 1.03030 1.04568 1.06121 1.07689 1.09273 1.10872 1.12486 1.14117 1.15763 1.17424 4 1.04060 1.06136 1.08243 1.10381 1.12551 1.14752 1.16986 1.19252 1.21551 1.23882 1.26248 1.31080 5 1.05101 1.07728 1.10408 1.13141 1.15927 1.18769 1.21665 1.24618 1.27628 1.30696 1.25971 1.19102 1.22504 1.29503 1.33100 1.36763 1.40493 1.57352 1.68506 1.76234 1.72800 1.36049 1.41158 146410 1.51807 2.07360 1.33823 1.40255 1,46933 1.53862 1.61051 2.48832 6 1.06152 1.09344 1.12616 1.15969 1.19405 1.22926 1.26532 1.30226 1.34010 1.37884 1.41852 1.50073 1.58687 7 1.07214 1.10984 1.14869 1.18869 1.22987 1.27228 1.31593 1.36086 1.40710 1.45468 1.50363 8 1.08286 1.12649 1.17166 1.21840 1.26677 1.31681 1.36857 1.42210 147746 1.53469 1.59385 1.71819 9 1.09369 1.14339 1.19509 1.24886 1.30477 1.36290 1.42331 1.48610 155133 161909 1.68948 1.83846 10 1.10462 1.16054 1.21899 1.28008 1.34392 1.41060 1.48024 1.55297 1.62889 1.70814 1.79085 1.96715 2.15892 167710 1.77156 1.87041 1.97382 2.99598 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 3.58318 1.99256 2.14359 2.30454 2.47596 1.85093 4.29982 1.99900 2.17189 2.35795 2.55804 2.77308 5.15978 2.36736 2.59374 2.83942 3.10585 6.19174 11 1.11567 1.17795 1.24337 1.31209 1.38423 145997 1.53945 1.62285 1.71034 1.80209 189830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 7.43008 12 1.12683 1.19562 1.26824 1.34489 1.42576 151107 1.60103 1.60588 1.79586 1.90121 201220 2.25219 13 1.13809 1.21355 1.29361 1.37851 1.46853 156396 1.66507 1.77220 1.88565 200577 2.13293 2.40985 2.71962 2.51817 2.81266 3.13843 3.49845 3.89598 8.91610 3.06580 345227 3.88328 4.36349 10.69932 12.83918 14 1.14947 1.23176 1.31948 1.41297 1.51259 161869 1.73168 1.85194 1.97993 2.11609 2.26090 2.57853 2.93719 3.34173 3.79750 4.31044 4.88711 15 1.16097 1.25023 1.34587 1.44830 1.55797 1.67535 1.80094 1.93528 2.07893 2.23248 2.39656 2.75903 3.17217 3.64248 4.17725 4.78459 5.47357 15.40702 16 1.17258 1.26899 1.37279 1.48451 1.60471 1.73399 1.87298 2.02237 2.18287 235526 2.54035 2.95216 17 1.18430 1.28802 1.40024 1.52162 1.65285 1.79468 1.94790 2.11338 2.29202 2.48480 2.69277 3.15882 3.70002 3.42594 3.97031 4.59497 5.31089 6.13039 18.48843 4.32763 5.05447 4.71712 5.55992 6.54355 7.68997 S.89509 6.86604 22.18611 18 1.19615 1.30734 1.42825 1.55966 1.70243 1.85749 202582 2.20848 240662 2.62147 2.85434 3.37993 19 1.20811 1.32695 1.45681 1.59865 1.75351 1.92250 2.10685 2.30786 252695 2.76565 3.02560 361653 20 1.22019 1.34686 1.48595 163862 1.80611 1.98979 2.19112 2.41171 2.65330 291776 3.20714 3.86968 3.99602 26.62333 4.31570 5.14166 6.11591 7.26334 8.61276 31.94800 4.66096 S.60441 6.72750 8.06231 9.64629 38.33760 21 1.23239 1.36706 1.51567 167958 1.86029 2.05943 2.27877 2.52024 2.78596 3.07823 3.39956 4.14056 5.03383 6.10881 7.40025 25 1.28243 1.45095 1.64061 1.85394 2.09378 2.36324 266584 3.00543 3.38635 301339 4.29187 30 1.34785 1.56308 1.81136 209757 242726 2.80679 3.24340 3.74532 4.32194 498395 5.74349 7.61226 10.06266 13.26768 17.44940 22.89230 29.95992 237.37631 40 1.48886 1.81402 2.20804 2.68506 3.26204 3.95926 4.80102 5.81636 7.03999 8.51331 10.28572 14.97446 21.72452 31.40942 45.25926 65.00087 93.05097 1469.77160 46.005 12 95.39622 8.94917 10.80385 5.42743 684848 8.62308 10.83471 13.58546 17.00006 Examination 2 pv of 1.jpg 1,165 759 pixels TABLE 2 Present Value of $1 PV- n 1.0% 2.0 % 1.5% 3.0 % 2.5% 4.0 % 3.5% 45% 5.0% 7.0 % 1 0.99010 0.98522 098039 097561 0.97087 0.96618 0.96154 0.95694 0.95238 094787 0.94340 0.93458 5.5% 6.0 % 8.0 % 9.0% 10.0% 12.0 % 20.0 % 11.0% 092593 0.91743 000909 0.90090 0.89286 0.83333 2 0.98030 0.97066 096117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89845 0.89000 087344 0.85734 084168 082645 081162 0.79719 0.69444 3 097059 0.95632 094232 0.92860 0.91514 0,90194 0.88900 087630 0.86384 0.85161 0.83962 0.81630 079383 0.77218 075131 073119 0.71178 0.57870 4 0.96098 0.94218 092385 0.90595 0.88849 0.87144 085480 0.83856 0.822770 0.80722 0.79209 0.76290 073503 0.70843 068301 0.65873 0.63552 0.48225 5 0.95147 0.92826 090573 0.88385 0.86261 0.84197 082193 0.80245 0.78353 0.76513 0.74726 0.71299 0.68058 064993 062092 0.59345 0.56743 0.40188 6 0.94205 0.91454 0.88797 0.86230 083748 0.813so 079031 076790 074622 072525 0.70496 0.66634 7 0.93272 0.90103 a87056 0.84127 0.81309 0.78599 075992 0.73483 0.71068 068744 0.66506 062275 8 0.92348 0.88771 085349 0.82075 078941 075941 073069 0.70319 0.67684 065160 0.62741 9 0.91434 0.87459 0.83676 080073 0.76642 073373 0.70259 067290 0.64461 061763 0.59190 054393 0.50025 0.46043 0.42410 0.39092 0.36061 10 0.90529 0.86167 0.82035 0.78120 0.74409 070892 0.67556 064393 061391 0.58543 0.55839 0.50835 0.63017 0.59627 0.56447 0.53464 0.50663 0.33490 0.58349 0.54703 051316 0.48166 0.45235 027908 0.58201 0.54027 0.50187 046651 0.43393 0.40388 023257 0.19381 0.46319 0.42241 039554 0.35218 0.32197 0.16151 11 0.89632 0.84893 0.80426 076214 0.72242 068495 0.64958 0.61620 058468 055491 0.52679 0.47509 0.42888 12 0.88745 0.83639 078849 074356 0.70138 066178 062460 0.58966 055684 0.52598 0.49697 0.44401 13 0.87866 0.82403 077303 072542 0.68095 0.63940 060057 0.56427 053032 0.49856 0.46884 0.41496 14 0.86996 0.81185 075788 0.70773 0.66112 061778 0.57748 0.53997 0.50507 0.47257 0.44230 0.38782 15 0.86135 079985 074301 069047 064186 0.59689 0.55526 0.51672 0.48102 0.44793 041727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.38753 035049 0.31728 0.28748 0.13459 0.39711 0.35553 031863 0.11216 0.09346 0.28584 0.25668 0.36770 0.32618 0.29966 0.25751 0.22917 0.23199 020462 0.34046 0.29925 0.26333 0.07789 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 057671 0.53391 0.49447 045811 042458 0.39365 0.33873 17 0.84438 0.77639 071416 0.65720 060502 055720 051337 0.47318 043630 040245 0.37136 0.31657 18 0.83602 0.76491 070016 064117 0.58739 053836 049363 0.45280 041552 0.38147 0.35034 029586 0.25025 0.21199 0.17986 0.15282 0.13004 19 0.82774 0.75361 068643 062553 0.57029 0.52016 047464 043330 0.39573 0.36158 0.33051 027651 20 081954 0.74247 067297 061027 0.55368 0.50257 045639 0.41464 037689 0.34273 0.31180 025842 0.2145S 0.17843 0.14864 0.12403 0.10367 0.29189 025187 021763 0.18829 0.16312 0.23107 0.19784 0.16963 0.14564 005409 0.27027 0.04507 0.03756 0.23171 0.19449 0.16351 0.13768 0.11611 0.03130 0.02608 21 0.81143 0.73150 0.65978 O.59539 053755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 24 078757 0.69954 062172 055288 049193 043796 0.39012 034770 0.31007 027666 0.24698 0.19715 25 0.77977 0.68921 0.60953 0.53939 047761 0.42315 0.37512 033273 0.29530 0.26223 0.23300 0.18425 28 075684 0.65910 0.57437 0.50088 043708 0.38165 0.33348 029157 025509 022332 0.19563 0.15040 29 074934 0.64936 056311 0.48866 042435 036875 0.32065 027902 024295 021168 0.18456 0.14056 0.19866 0.16370 0.13513 0.11174 0.09256 0.15770 0.12640 0.10153 0.08170 0.06588 0.14602 0.11597 009230 0.07361 0.05882 0.02174 0.01258 0.01048 0.11591 0.08955 0.06934 005382 0.04187 0.00607 0.10733 008215 006304 004849 0.03738 0.00506 30 0.74192 0.63976 0.55207 047674 041199 0.35628 0.30832 0.26700 0.23138 020064 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 003338 31 073458 0.63031 0.54125 0.46511 0.39999 0.34423 0.29646 025550 0.22036 019018 016425 0.12277 0.09202 0.06915 0.05210 0.03935 0.02980 40 0.67165 0.55126 0.45289 0.37243 0.30656 025257 0 20829 0.17193 0.14205 0.11746 0.09722 0.06678 0.00421 0.00351 0.03184 0.02209 0,01538 001075 0.00068 0.04603 TABLE 3 Future Value of an Ordinary Annuity of $1 1+-1 FVA 1.0 % 1.5% 2.0% 3.0 % 4.0 % 2.5% 3.5% 4.5% 5.0% 7.0 % 5.5% 6.0% 10.0 % 8.0% 9.0% 20.0 % 11.0% 12.0% 1.0000 1.0000 1.0000 1.0000 1.0000 1,0000 2.0150 2.0200 2.0250 2.0300 2.0350 2.0400 1.0000 1.0000 1,0000 1.0000 1.0000 1,0000 1.0000 1.0000 1.0000 1,0000 1.0000 1.0000 2.0100 2.0450 2.0500 20550 2.0600 20700 2.0800 2.0900 2.1000 2.1100 2.1200 2.2000 3 3.0301 3.0452 3.0604 3.0756 3.0909 3.1062 3.1216 3.1370 3.1525 3.1680 3.1836 3.2149 3.2464 3.2781 3.3100 3.3421 3.3744 3.6400 4.0604 4.0909 4.1216 4.1525 4.1836 4.2149 4.2465 4.2782 4.3101 4.3423 4.3746 44399 4.5061 4.5731 4.6410 4.7097 4.7793 5.3680 5 5.1010 5.1523 5.2040 5.2563 5.3091 5.3625 5.4163 5.4707 S.5256 5.5811 56371 5.7507 5.8666 5.9847 6.1051 6.2278 6.3528 74416 6 6.1520 6.3877 64684 65502 6.6330 6.2296 6.3081 6.7169 6.8019 6.8881 69753 7.1533 7.3359 7.5233 7.7156 7.9129 8.1152 9.9299 7 7.2135 7.3230 7.4343 7.5474 76625 7.7794 7.8983 8.0192 8.1420 8.2669 8.3938 8.6540 8.9228 9.2004 9.4872 9.7833 10.0890 12.9159 8.7361 8.8923 9.0517 92142 9.5593 9.7546 9.9545 10.1591 10.3685 10.5828 10 10.4622 10.7027 10.9497 11.2034 11.4639 11.7314 12.0061 8 8.2857 8.4328 8.5830 9.3800 95491 9.7216 98975 10.2598 10.6366 11.0285 11.4359 11.8594 12.2997 16.4991 9 9.3685 10.8021 11.0266 11.2563 11.4913 11.9780 12.4876 13.0210 13.5795 14.1640 14.7757 20.7989 12.2882 12.5779 12.8754 13.1808 13.8164 144866 15.1929 15.9374 16.7220 17.5487 25.9587 11 11.5668 11.8633 12.1687 12.4835 12.8078 13.1420 13.4864 13.8412 14.2068 14.5835 14.9716 12 12.6825 13.0412 13.4121 13.7956 14.1920 14.6020 15.0258 15.7836 16.6455 17.5603 18.5312 19.5614 20.6546 32.1504 15.4640 15.9171 16.3856 168699 17.1599 17.7130 18.2868 18.8821 20.1406 21.4953 22.9534 24.5227 17.8885 21.3843 22.7132 24.1331 18.9771 20.1407 39.5805 13 13.8093 14.2368 14.6803 15.1404 15.6178 16.1130 166268 14 14.9474 15.4504 15.9739 16.5190 17.0863 17.6770 18.2919 15 16.0969 16.6821 17.2934 17.9319 18.5989 19.2957 20.0236 26.2116 28.0291 48.4966 19.5986 20.2926 21.0151 18.9321 22.5505 24.2149 26.0192 27.9750 30.0949 32.3926 34.4054 37.2797 59.1959 20.7841 21.5786 22.4087 23.2760 25.1290 27.1521 29.3609 31.7725 72.0351 16 17.2579 17.9324 18.6393 19.3802 20.1569 20.9710 21.8245 227193 23.6575 24.6411 25.6725 278001 17 18.4304 19.2014 20.0121 20.8647 21.7616 22.7050 23.6975 24.7417 25.8404 26.9964 282129 30.8402 33.7502 369737 40.5447 18 19.6147 20.4894 21.4123 22.3863 234144 24.4997 256454 26.8551 28.1324 29.4812 30.9057 33.9990 37.4502 41.3013 45.5992 50.3959 55.7497 128.1167 19 20.8109 21.7967 22.8406 23.9460 25.1169 26.3572 27.6712 29.0636 305390 32.1027 33.7600 37.3790 41.4463 460185 20 22.0190 23.1237 24.2974 25.5447 268704 28.2797 29.7781 30.3243 33.0034 35.9497 39.1899 42.7533 87 4421 44.5008 48.8837 105.9306 56.9395 63.4397 154.7400 64.2028 72.0524 186.6880 51.1591 31.3714 33.0660 34.8683 367856 40.9955 45.7620 51.1601 57.2750 21 23.2392 24.4705 25.7833 27.1833 28.6765 30.2695 31.9692 30 34.7849 37.5387 40.5681 43.9027 47.5754 51.6227 56.0849 40 48.8864 54.2679 60.4020 67 4026 754013 84.5503 95.0255 107.0303 120.7998 136 6056 154.7620 199.6351 259.0565 337.8824 442.5926 581.8261 767.0914 7343.0579 33.7831 35.7193 37.7861 399927 44.8652 50.4229 567645 64.0025 72.2651 81.6987 225.0256 94.4608 1132832 136 3075 164.4940 199.0209 241.3327 1181.8816 61.0071 66.4388 724355 79.0582 TABLE 6 Present Value of an Annuity Due of $1 (1+x(1+0 PVAD- n/i 1.0 % 2.0% 5.0 % 1.5% 2.5% 3.0 % 3.5% 4.0% 7.0 % 11.0 % 4.5 % S.5% 6.0% 8.0% 10.0 % 9.0% 12.0% 20.0% 1.00000 1 1,00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1,00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 1.99010 1.98522 1.98039 1.97561 1.97087 1.96618 1.96154 1.95694 1.95238 1.94787 1.94340 1.93458 1.92593 1.91743 1.90909 1.90090 1.89286 1.83333 31 2.97040 295588 2.94156 2.88609 2.87267 3.85602 3.82861 3.80164 3.77509 3.74896 4.85438 4.80773 4.76197 4.71710 4.67308 4.62990 4.58753 2.92742 2.91347 2.89969 2.85941 284632 2.83339 2.80802 2.78326 2.75911 2.73554 2.71252 2.69005 2.52778 4 3.94099 3.91220 3.88398 3.72325 369793 3.67301 362432 357710 3.53129 3.48685 3.44371 3.40183 3.10648 4.54595 4.50515 4.46511 4.38721 4.90197 4.31213 4.23972 4.16987 4.10245 4.03735 3.58873 5.85343 5.78264 5.71346 6 5.64583 5.57971 5.51505 5.45182 5.38998 S.32948 5.27028 5.21236 5.10020 4.99271 4.88965 4.79079 4.69590 4.60478 3.99061 6.50813 6.41719 53285S 624214 6.15787 7 6.79548 689719 660143 591732 5.76654 5.62288 5.48592 5.35526 5.23054 5.11141 4.32551 5.86842 5.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 653705 632825 5.03097 6.07569 599553 8 7.72819 7.59821 7.47199 7.34939 7.23028 7.11454 7.0020S 6.89270 6.78637 7.46321 7.33457 668297 658238 638929 620637 6.03295 8.65168 8.48593 8.32548 8.17014 801969 7.87396 8.60769 7.73274 7.59589 7.20979 697130 6.74664 6.53482 9.56602 9.36052 9.16224 10 8.97087 878611 8.43533 8.26079 7.24689 6.99525 8.10782 795220 7.80169 7.51523 11 10.47130 10.22218 9.98259 9.75206 9.53020 9.31661 9.11090 8.91272 8.72173 53763 8.36009 8.02358 7.71008 7.41766 7.14457 688923 6.65022 5.19247 8.88687 8.49867 813996 7.80519 7.49506 7.20652 6.93770 5.32706 9.86325 9.61852 9.38384 94269 8.53608 8.16073 7.81369 7.49236 7.19437 5.43922 12 11.36763 11.07112 10.78685 10.51421 10.25262 10.00155 9.76048 9.52092 9.30641 9,09254 13 12.25508 11.90751 11.57534 11.25776 10.95400 10.66333 10.38507 10.11858 14 13.13374 12.73153 12.3480 15 14.00370 13.54338 13.10625 12.69091 12.29607 11.92052 11.56312 11.22283 10.89864 10.58965 10.29498 974547 9.24424 8.78615 8.3669 7.98187 762017 561057 11.98318 1163496 11.30274 10.98565 10.68285 10.39357 10.1170 9.85268 9.35765 8.90378 8.48690 8.10336 7.74987 7.42355 5.53268 16 14.86505 14.34323 13.84926 13.38138 12.93794 12.51741 12.11839 11.73955s 11.37966 11.03758 1071225 10.10791 955948 9.06069 8.60608 8.19087 7.81086 5.67547 17 15.71787 15.13126 14.57771 14.05500 13.56110 13.09412 12.65230 12.23402 1183777 11.46216 11.10590 10.44665 9.85137 9.31256 18 16.56225 15.90765 15.29187 14.71220 14.16612 13.65132 13.16567 12.70719 12.27407 11.06461 11.47726 10.76322 10.12164 9.54363 19 17.39827 16.67256 1599203 15 35336 14.75351 14.18968 13.65930 13.15999 12.68959 12.24607 11.02760 1105909 10.37189 9.75563 20 18.22601 17.42617 16.67846 15.9789 15.32380 14.70904 14.13394 13.59329 13.08532 12.60765 12.15812 11.33560 10.60360 9.95011 8.82371 8.37916 7.97399 5.72956 9.02155 8.54879 .11963 5.77463 9.20141 870162 8.24967 5.91219 9.36492 883929 8.36578 5.84350 21 19.04555 18.16864 17.35143 16.58916 15.87747 15.21240 14.59033 14.00794 13.46221 12.9503 12.46092 11.59401 10.81815 10.12855 9.51356 8.96333 8.46944 5.8695 25 22.24339 21.03041 19.91393 18.88499 17.93554 17.05837 16.2496 15.49548 14.79864 14.15170 13.55036 12.46933 11.52876 10.70661 30 26.06579 24.37608 22.84438 21.45355 20.18845 19.03577 17.98371 17.02189 16.14107 15.33310 1459072 1327767 12.15841 11.19828 10.36961 9.65011 9.02181 5.97472 40 33.16303 30.36458 27.90259 25.73034 23.80822 22.10250 20.58448 19 22966 18.01704 1692866 1594907 1426493 12.87858 11.72552 10.75696 9.93567 923303 599592 9,98474 9.34814 8.78432 5.93710