1. On January 1,2018, Flying High Airines leased a new airplane for a term of 10 years The expected life of the airplane is 20 years. There are no rights to purchase the asset at the end of the term, no bargain purchase option, and no residual value guarantee. The lease stipulates that Flying High makes annual payments of $650,000 beginning at the end of the first year (December 31, 2018). Flying High has an incremental borrowing rate of 4.5% and the fair market value of the airplane on January 1, 2018 is $6,250,000 (for simplicity, assume the lessor's implicit rate is greater than 4.5%). What journal entries related to the lease arrangement should be recorded during 2018 (assume Flying High's fiscal year end is December 31). a. b. Identify any effects the lease arrangement and the associated reporting woul have on the balance sheet, income statement, and statement of cash flows for 2018 What is the annual lease payment that results in a present value of minimum lease payments equal to 90% of the fair market value of the airplane ($6,250,000)? c