And also Prepare the journal entries on sandhills books that relate to the lease agreement for the following dates

Sandhill Company, as lessee, enters into a lease agreement on July 1,2021, for equipment. The following data are relevant to the lease agreement: 1. The term of the noncancelable lease is 4 years, with no renewal option. Payments of $882,924 are due on July 1 of each year. 2. The fair value of the equipment on July 1, 2021 is $3,200,000. The equipment has an economic life of 6 years with no salvage value. 3. Sandhill depreciates similar machinery it owns on the sum-of-the-years'digits basis. 4. The lessee pays all executory costs. 5. Sandhill's incremental borrowing rate is 10% per year. The lessee is aware that the lessor used an implicit rate of 7% in computing the lease payments. Indicate the type of lease Sandhill Company has entered into and what accounting treatment is applicable. Attempts: 0 of 1