Question: 2. Ronald Corp. leased a machine on January 1, 2017, for a 5-year period from Donald Corp. The lease agreement specifies annual payments of $80,000

2. Ronald Corp. leased a machine on January 1, 2017, for

2. Ronald Corp. leased a machine on January 1, 2017, for a 5-year period from Donald Corp. The lease agreement specifies annual payments of $80,000 each December 31, beginning December 31, 2017. Ronald has the option to buy the machine at the end of the lease for $20,000 as a bargain purchase option; the estimated residual value (guaranteed by the lessee) for that date is $30,000. The machine has a useful life of 6 years, with no residual value at the end of the 6-year life. The interest rate used by both companies is 5%. 5%, 5 periods .78353 PV $1 PV ord. ann. 4.32948 PV ann. due 4.54595 Prepare all journal entries for Ronald, the lessee, only for 2017. January 1, 2017 December 31, 2017

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