Record the first month amortization on Marins books

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Problem - Marin Company leases an automobile with a fair value of $11,679 from John Simon Motors, Inc., on the following terms:

1. Non-cancelable term of 513 months.

2. Rental of $230 per month (at the beginning of each month).

3. Marin guarantees a residual value of menu. Delaney expects the probable residual value to be $1,600 at the end of the lease term.

4. Estimated economic life of the automobile is 60 months.

5. Mario's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown.

Required - Record the first month's amortization on Marin's books (assume straight-line).

Reference no: EM132483411

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