1. Lessee leases asset from Lessor. Fair market value of the asset currently is $500,000. Asset is new and has a remaining economic life of 10 years. Lease term is for 7 years. Implict rate on lease is 12% and this rate is known by Lessee. Lessor believes asset will be worth $150,000 at end of lease term (i.e., residual value-150,000). Lessor requires that Lessee guarantee $45,000 of the $150,000 residual value. Lessee believes that asset will be worth at least 45,000 at end of lease term. Lease payments of 94,691 are made annually at year-end. Lease inception date is January 1. a. Assume cost of leased asset FMV of the asset at lease inception. Classify the lease, book the lease (both Lessee and Lessor entries), and prepare journal entry (both Lessee and Lessor entries) for the first lease payment due December 31. b. Assume Lessor's cost of lease asset-400,000. Classify the lease, book the lease (both Lessee and Lessor entries), and prepare journal entry (both Lessee and Lessor entries) for the first lease payment due December 31