Completion Status: 2 3 4 5 6 7 B L Moving to another question will save this response. Question 4 Question 4 of 8 9 points On January 1, 2020, Sitra Company leased equipment from National Corporation. Lease payments are $300,000, payable annually beginning on January 1, 2020 for 20 years. The lease is non-cancelable. The following information pertains to the agreement: 1. The fair value of the equipment on January 1, 2020 is $2,550,000. 2. The estimated economic life of the equipment was 25 years on January 1, 2020 with guaranteed residual value of $75,000. 3. The lease is non-renewable. At the termination of the lease, the equipment reverts to the lessor. 4. The lessor's implicit rate is 10% which is known to Sitra. Sitra's incremental borrowing rate is 12% (The PV of $1 for 20 periods at 10% is 0.14864 and the PV for an ordinary annuity of $1 for 20 periods at 10% is 8.51356). 5. Sitra uses straight-line method for depreciation. structions: Compute the present value of minimum lease payments. Prepare all necessary journal entries on the lessee's books for the year 2020. e toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). I US Paragraph Arial 10pt == A V - RBC + r TT 99 HE Ix 86 DELL B www 0 WORDS POWERED