Calculate the present value of lease payments

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Reference no: EM13953470

You have signed an agreement to lease a car for four years and will make annual payments of $4,000 at the end of each year. (Assume that the lease meets the criteria for a capital lease.)

Required

1. Calculate the present value of the lease payments assuming an 8% interest rate.

2. Record the journal entry for the signing of the lease.

3. When the first lease payment is made, what portion of the payment will be considered interest?

Reference no: EM13953470

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