On January 1, 2017, Martinez Corporation signed a 5-year noncancelable lease for a machine. The...
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Accounting
On January 1, 2017, Martinez Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Martinez to make annual payments of $8,215 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Martinez uses the straight-line method of depreciation for all of its plant assets. Martinezs incremental borrowing rate is 10%, and the lessors implicit rate is unknown
| The present value of the minimum lease payments |
Prepare all necessary journal entries for Martinez for this lease through January 1, 2018.
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