(32 points) Michael Owen, as the lessee, enters into a 5-year lease agreement for a machine on October 1, 2021. The machine has an economic life of 6 years, and a fair market value of $60,000. The lease is non-cancelable and requires annual payments of $13,938, with the first payment due on September 30, 2022. Owen guarantees a residual value of $4,000 at the end of the lease term. He expects the actual residual value to be $2,500. The implicit rate in the lease is 7%. Should Michael Owen classify this as an operating or financing lease? Carefully explain why? Compute the amount at which the lease should be capitalized. (The present value factor of an ordinary annuity for n=5, i-7% equals 4.1002; and the present value factor of a single sum for n=5, i=7% equals 0.7129). Prepare the journal entries on Michael Owen's books that relate to the lease agreement for the following dates: 1. October 1, 2021. 2. December 31, 2021 (the fiscal year-end). 3. September 30, 2022. 4. December 31, 2022 (the fiscal year-end). (Round all your answers to the nearest dollar. I strongly recommend preparing an amortization table!)