Question 28 On January 1, 2017, Blue Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Blue to make annual payments of $8,317 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $5,300 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Blue uses the straight-line method of depreciation for all of its plant assets. Blue's incremental borrowing rate is 10%, and the lessor's implicit rate unknown. Click here to view factor tables Compute the present value of the minimum lease payments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) The present value of the minimum lease payments $ Prepare all necessary journal entries for Blue for this lease through January 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round answers to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit 1/1/17 Leased Equipment Lease Liability (To record the lease.) Lease Liability 8317 Cash 8317 (To record first payment.) 12/31/17 Depreciation Expense Accumulated Depreciation-Capital Leases (To record depreciation.) Interest Expense Interest Payable (To record interest.) 1/1/18 Lease Liability Interest Payable Cash (To record second payament.)