Stellar Company leases an automobile with a fair value of $10,143 from John Simon Motors, Inc., on the following terms:

1.Noncancelable term of 50 months

.2.Rental of $230 per month (at end of each month). (The present value at 1% per month is $9,016.)

3.Estimated residual value after 50 months is $1,020. (The present value at 1% per month is $620.) Stellar Company guarantees the residual value of $1,020.

4.Estimated economic life of the automobile is 60 months.

5.Stellar Company's incremental borrowing rate is 12% a year (1% a month). Simon's implicit rate is unknown.

How to record the present value of the minimum lease payments?

How to record the first month's deprecation on Stellar Company's books (assume straight-line)