8_On September 1, 2021, Custom Shirts Inc. entered into a lease agreement appropriately classified as an operating lease. The lease term is three years. The annual payments by Custom Shirts are (a) $20,000 for year 1, (b) $24,000 for year 2, and (c) $28,000 for year 3. How much total lease expense will Custom Shirts recognize for 2021?

110_On January 1, 2021, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $240,000 for the machine and is leasing it to Zone for $34,000 per year, an amount that will return 10% to Calloway. The present value of the lease payments is $240,000. The lease payments are due each January 1, beginning in 2021. What is the appropriate interest entry on December 31, 2021?

Multiple Choice

Cash24,000 Interest revenue 24,000Cash20,600 Interest receivable 20,600Interest receivable20,600 Interest revenue 20,600Interest receivable24,000 Interest revenue 24,000