Sage Hill AG leases an automobile with a fair value of 23,171 from Simon Motors, on the following terms. 1. Non-cancelable term of 50 months. 2. Rental of 500 per month (at the beginning of each month). (The present value at 0.5% per month is 22,182.) 3. Sage Hill guarantees a residual value of 1,190 (the present value at 0.5% per month is 538). Sage Hill expects the probable residual value to be 1,190 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Sage Hill's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. What is the present value of the lease payments to determine the lease liability? (Round answer to O decimal places, e.g. 5,275.) Present value of the lease payments 22,182 eTextbook and Media List of Accounts Attempts: 1 of 3 used (c) Your answer is correct. Record the lease on Sage Hill's books at the date of commencement. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Right-of-Use Asset Lease Liability eTextbook and Media eTextbook List of Accounts Debit 22182 Credit 22182 Assistance Used Attempts: 3 of 3 used Your Answer Correct Answer (Used) Record the first month's lease payment (at commencement of the lease). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Lease Liability Cash Debit 500 Credit 500 (d) Record the second month's lease payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit