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On December 31,2024, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms...

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Accounting

On December 31,2024, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Marin to make annual payments of $8,566 at the beginning of each year, starting December 31,2024. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Marin uses the straight-line method of depreciation for all of its plant assets. Marin's incremental borrowing rate is 5%, and the lessor's implicit rate is unknown. (a) what type of lease is this? (b) Compute the present value of the lease payments. (c) prepare all necessary journal entries for Marin for this lease through December 31,2025.

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