15-2 (Algo) Finance lease [LO15-2] At the beginning of 2021, VHF Industries acquired a machine with a fair value of $7,989,010 by signing a three-year lease. The lease is payable in three annual payments of $3.1 million at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the effective rate of Interest Implicit in the agreement? 2-4. Prepare the lessee's journal entries at the beginning of the lease, the first lease payment at December 31, 2021 and the second lease payment at December 31, 2022. 5. Suppose the fair value of the machine and the lessor's implicit rate were unknown at the time of the lease, but that the lessee's incremental borrowing rate of Interest for notes of similar risk was 7%. Prepare the lessee's entry at the beginning of the lease. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 4 Req 5 What is the effective rate of interest implicit in the agreement? The implicit interest rate % Prepare the lessee's journal entries at the beginning of the lease, the first lease payment at December 31, 2021 and the second lea payment at December 31, 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first acco field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) Show l View transaction list Journal entry worksheet 1 2 3 Record lease. Journal entry worksheet < 12 3 Record cash payment. Journal entry worksheet < 1 2 3 Record cash payment. Req 1 Req 2 and 4 Req 5 Suppose the fair value of the machine and the lessor's implicit rate were unknown at the time of the lease, but that the lessee's incremental borrowing rate of interest for notes of similar risk was 7%. Prepare the lessee's entry at the inception of the lease. (If n entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dc and not in the millions of dollars. Round your answers to nearest whole dollars.) View transaction list Journal entry worksheet < Record lease. Note: Enter debits before credits. Date January 01, 2021 General Journal Debit Credit Record entry Clear entry View general journal Show le