Quest 7 Note Maduro 10.00 Recording Entries for Finance Lease with Unguaranteed Residual Value-Lessee Lessor Corporation, a manufacturer of equipment, enters imo a lease of specialized equipment with Lessee Corp, on

January 1 of Year 1. Title to the asset remains with Lessor Corp., at the end of the lease. Lessee Corp. does not guarantee the residual value of the specialized equipment at the end of the lease term and the lease contains no renewal or purchase options. The following information pertains to the lease 5 years years LANGT Economic life of these Annual lease pay Payment date payment due at lease commencement Tervice of the lea Lessor Ceps carrying value of the leased equipment Rare implicit in the lease known by lesse Eined fair value of the equipment at the end of the lease tam Required a Determine the classification of the lease for Lessee Corporation. b. Prepare a schedule of the loase ability for the first two years of the lease arm Note: Round each amount in the schedule to the naarest whole dolur. Use the rounded amount for later calculations in the schedule. Det 1. Your Jan 1. Your S 12 5 Date Dec 31, Year Dec 31, 1 Jan 1, 2 Payment on Lisbety Duc. 31, Year 2 Dec 31 Year 2 05 05 DS Provide journal es relating to the leass for Lessee Corporation en january and December 31 of Year 1 and Year 2 -Note: Round your answers to the nearest whole do ar. Lease Liability Change 0$ DS DS Acc Name To record interes 3omcase La Lubility 1a record annuation $ V Todass and habety related to lose as as 05 $1,000 Arrually on Jan 1 $5.200 $4.500 602 くくくくくくくくくくくくら D 0 G 9 Dr. a 0 D 4 0 0 D 4 0 0 0 D $400 14 0 4 0 D 0 0 0 D • 0 D . 4 0 0