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termediate accounting2-summer) Perez Company, as lessee, enters into a lease agreement on January 1, 2018,...

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termediate accounting2-summer) Perez Company, as lessee, enters into a lease agreement on January 1, 2018, for equipment. The following data are relevant to the lease agreement: 1. The term of the noncancelable lease is 4 years. Payments of 200,000 are due on January 1 of each year. 3. Perez depreciates similar machinery it owns on the straight-line basis. 4. Perez Co. agrees to guarantee the 20,000 residual value of the asset at the end of the lease term. The expected value of the residual value is 25,000 5. Perez incremental borrowing rate is 10% per year. The lessee is not aware that the lessor used an implicit rate of 8%. Instructions Prepare the joumal entries on Perez's books that relate to the lease agreement for the following dates: (Round all amounts to the nearest dollar. Include a partial amortization schedule.) 1. January 1, 2018. 2. December 31, 2018. 3. January 1, 2019. 4. Assume that due to poor maintenance of the equipment, Perez and the lessor agree that the fair value of the asset is 18,000 upon returning the equipment to the lessor on January 1, 2022. (No need for the amortization schedule)

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