On January 2, 2017 Nash Company leases a machine with a fair value of $34,000 from Snead, Inc., on the following terms:

1.		Noncancelable term of 4 years.
2.		Rental of $8,400 per year (at beginning of each year).
3.		Estimated residual value after 4 years is $4,200. Nash Company guarantees the residual value of $4,200.
4.		Estimated economic life of the machine is 5 years.
5.		Nash Companys incremental borrowing rate is 8% a year. Sneads implicit rate is unknown.

Instructions:

What is the present value of the minimum lease payments?

Record the lease and first lease payment on Nash Companys books at the date of inception.

Record the first years depreciation on Nash Companys books (assume straight-line).

Record the interest payable on Nashs books at December 31, 2017.