Renault entered into 2 lease contracts. The first one was a 6-year lease for equipment with a 2,000 monthly lease payment at the beginning of each month. Renault took passion of the equipment on 1/1/2017. The market rate was 9.5%. The second lease contract was a 5 year lease, beginning on 1/1/2017 for retail shops with a semi-annual payments of 36,000 due at the end of the period. Assume the market rate of interest on such transactions is 6.5%. Assume the first lease is a capital lease and the second lease is an operating lease.

1. Determine the present value of the first contract.

N = I/Y = PV = PMT = FV =

2. Determine the present value of the. Second lease.

N = I/Y = PV = PMT = FV =

3. Prepare the appropriate journal entry for the first lease on 1/1/2017.

4. Prepare the appropriate journal entry for the second lease on 7/1/2017.