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Marin Company leases an automobile with a fair value of $16,513 from John Simon Motors,...

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Accounting

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Marin Company leases an automobile with a fair value of $16,513 from John Simon Motors, Inc., on the following terms: 1. 2. 3. Non-cancelable term of 50 months. Rental of $340 per month (at the beginning of each month). (The present value at 0.5% per month is $8,873.) Marin guarantees a residual value of $1,420 (the present value at 0.5% per month is $920). Delaney expects the probable residual value to be $1,420 at the end of the lease term. Estimated economic life of the automobile is 60 months. Marins incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. What is the nature of this lease to Marin? The nature of this lease is a/an finance lease. What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimal places, e.g. 5,275.) Present value of the lease payments $ e Textbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit

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