At January 1, 2024. Cafe Med leased restaurant equipment from Cresent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $31,000 beginning January 1, 2024, the beginning of the lease, and on each December 31 thereafter though 2031. The equipment was acquired recently by Crescent at a cost of $234,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. Because the lease term is only 9 years, the asset does have an expected residual value at the end of the least term of $68,243. Cresent seeks a 9% return on its lease investments. 1. What type of lease is this? 2. Make the necessary journal entries for the first year by Lessee. 3. Make the necessary journal entries for the first year by Lessor.

note: use the following table for present value calculations:

N/R	3%	5%	6%	9%
1	1.0000	1.000	1.000	1.000
5	4.71710	4.54595	4.46511	4.23972
9	12.29607	10.89864	10.29498	6.53482
20	15.32380	13.08532	12.15812	9.95011