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Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2020,...

Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2020, that requires 6 annual payments of $38,000 each, beginning September 1, 2020. In addition, Cullumber guarantees the lessor a residual value of $27,000 at lease end. The equipment has a useful life of seven years.

Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the capital lease and prepare Cullumber’s September 1, 2020 journal entry assuming an interest rate of 12%. (Credit account titles are automatically indented when the 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 factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

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