00 1 Lessor Co. and Lessee Co. signed a 4-year lease on Jan. 1, 2020 The leased 12 property cost Lessor Co. $65,000, which was also its carrying value at the commencement 3 of the lease. The leased asset had an estimated life of six years, and the property reverts to 4 Lessor Co. at the end of the lease term. Lease payments of $15,999.49 are payable on Jan. 1 of each 5 year and were set to yield Lessor Co. a return of 9% which was known to Lessee Co. The 6 estimated residual value at the end of the lease term is $12,000 and is guaranteed by Lessee Co. 7 Lessee expects the residual value at the end of the lease term to be $12,000. The lease contains 8 no purchase option. Round amounts to the nearest $1. 9 10 How would the Lessee Co. classify the lease? Support your answer. 11 b Prepare an amortization schedule of the lease liability, Prepare the entries for Lessee Co for 2020 to (1) record the right-to-use asset and liability 13 (2) record the first lease payment, and (3) record adjusted entries at year-end. 14 d Repeat parts (b) and (c) but assume instead that Lessee Co expects the estimated residual 15 value at the end of the lease term to be $3.500. 16 17 Prepare the necessary schedules and show all calculations. 18 Label all work! a 12 C SBS 2 3 4 59 19