Charles Corporation entered into a lease agreement on January 1, 2020 to provide Addison Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payment of $972,293 to be made at the beginning of each year. 2. The machinery has a fair value and cost of $6,400,000 and an economic life of 8 years. 3. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not a specialized nature. 4. The implicit rate is 6%, which is known by Addison. 5. Collectability of the payments is probable. 1 A B 1 $$ a. What type of lease is this for the Lessee - Addison and Why? b. Prepare the 2020 Journal Entries for Addison Corporation