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Pronghorn Co. leases equipment to Stellar Inc. on January 1, 2017. The following information relates to the lease agreement.

core/37313/ w ments/39589507module item 12617759 Tue, Apr 28, 2020, 12:14:47 PM ( A NP Next > New York 04:00) 0.45/1 Question 10 View Policies Show Attempt History Current Attempt in Progress Pronghorn Co, leases equipment to Stellar Inc. on January 1, 2017. The following information relates to the lease agreement 1. The term of the lease is 5 years with no renewal option, and the machinery has an estimated economic life of 6 years. The cost of the machinery is $879,000, and the fair value of the asset on January 1, 2017. is $1,020,000. 3. At the end of the lease term, the asset reverts to the lessor and had a guaranteed residual value of $73,000. Stellar depreciates all of its equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2017 5. The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor. 6. Pronghorn desires a 8% rate of return on its investments. Stellar's incremental borrowing rate is 11%. Pronghorn's implicitrate is unknown to Stellar. Instructions (Assume the accounting period ends on December 31.) Your answer is correct. Determine the nature of this lease for both the lessee and the lessor. 12:25 + On January 2, 2017 Nash Compe * how to calculate pv in excel - Go om/courses/37313/assignments/3958950?module_item_id=12617759 X Your answer is incorrect. Calculate the amount of the annual rental payment required. (Round present value factor calculati the final answer to 0 decimal places e.g. 58,971.) Annual Lease Payment $ e Textbook and Media List of Accounts - Your answer is partially correct. Prepare the journal entries Pronghorn would make in 2017 and 2018. (Round answers to decima are automatically indented when amount is entered. Do not indent manually. If no entry is required, sele enter for the amounts.) US + 2, 2017 Nash Compex G how to calculate prin excel-Go x 13/assignments/3958950?module_item_id-12617759 - your answer is partial correct # 2 NP Prepare the journal entries Pronghorn would make in 2017 and 2018. (Round answers to decimal places, e.. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Jan 1, 2017 Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record sales revenue) Cash Lease Receivable (To record rental payment) Interest Recevable Interest Revenue Oie w On laruary 2, 2017 Nach Comps x G how to calculate pv in excele x + urses/37313/assignments/3950950?module_item_id=12617759 Jan 1, 2018 Cash Interest Receivable Lease Receivable Dec 31, 2018 Interest Receivable Interest Revenue e Textbook and Media List of Accounts Your answer is incorrect Compute the present value of the lease payments for Stellar. (Round present value factor calculations to decimal places, eg. 1.25124 and the final answer to decimal places es. 58,971) Present Value of the Lease Payments for Stellar $

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