1. Create a numerical example that meets the definition of a capital (now finance) lease and describe how the lease would be recorded and subsequent rent payments recorded for both the lessee and the lessor. Within the example note the annual rent payments, term of the lease, discount rate, cost of the asset, current selling price of the asset, and any residual value if used. Discuss first why the lease is a capital (now finance) lease. Describe the debits/credits for both the lessee and the lessor when the lease was entered into and the debits/credits of the first annual payment.