02 On Jan 1, 2017. Jack Company lases space for a donut shop. The lease is for three years with payments to be made at the beginning of each year. The lease calls for Jack to pay 550.000 on January 1, 2017. The lease calls for subsequent rent payments to increase 10% per year. Jack has adopted early ASC 842 and has appropriately classified the lease as an operating lease. Jack has a calendar reporting year and an incremental borrowing rate of 10% Jack uses straight line depreciation for its long.lived assets Required: 1. Calculate the value of lease (11 marks) 2. What journal entries should Jack make at January 1, 2017, to record the effects of the lease?( 4 marks) 3. Prepare the amortization schedule for 2017 and 2018 (7 marks) 4. What journal entries would Jack make on December 31, 2017 to record the effects of the lease? ( 3 marks)