1)Doris Smith recorded a capital lease at PV $350,640 on January 1, 2017. The interest rate is 11%. The leased asset has a life of 8 years. Smith made the first lease payment of $57,051 on 1/1/17.

The lease requires 6 annual payments.

A.Why is this a capital lease?

B.Prepare the amortization schedule for the first 3 years for the lessee lessor

C.Prepare lessee and lessor journal entries for the first three years

D.Assume, additionally, that there is an unguaranteed residual of $12,000, PV-$10,000. Prepare the amortization schedules and journal entries for the lessee and lessor for the first 2 years.