On December $31,2024,$ Splish Brothers Corporation signed a $5-$year, non$-$cancelable lease for a machine. The terms of the lease called for Splish Brothers to make annual payments of $\backslash (\backslash$$ $8,634\backslash )$ at the beginning of each year, starting December $31,2024.$ The machine has an estimated useful life of $6$ years and a $\backslash (\backslash$$ $4,900\backslash )$ unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Splish Brothers uses the straight$-$line method of depreciation for all of its plant assets. Splish Brothers's incremental borrowing rate is $6\backslash \%,$ and the lessor's implicit rate is unknown.

Click here to view factor tables.

$($a$)$

What type of lease is this?

This is a$/$an lease.

eTextbook and Media

List of Accounts

Attempts: $0$ of $5$ used $($b$)$

Compute the present value of the lease payments. $($For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answer to $0$ decimal places e$.$g$.5,275.)$

Present value of the lease payments $\backslash$$

eTextbook and Media

List of Accounts

Prepare all necessary journal entries for Splish Brothers for this lease through December $31,2025.($List all debit entries before credit entries. Record journal entries in the order presented in the problem. 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 $0$ for the amounts. Round answers to $0$ decimal places e$.$g$.5,275.)$

Date

Account Titles and Explanation

Debit

Credit

$($To record the lease$)$

$($To record first lease payment$)$

$]$

$[]$

$($To record amortization of the right$-$of$-$use asset$)$

$]$

$($To record lease payment$)$