Doris is leasing a truck whose yearly rental is $5,189. The lease term is 3 years. The estimated economic life of the truck is 4 years. The fair value of the truck is $20,000. The cost of the truck is $15,000. The guaranteed residual value, expected to be paid, is $7000. The Incremental borrowing rate is 8%. $ 14,443

PV for annual lease payments of $5,189 = $ 14,443

PV for guaranteed residual of $7,000 = $ 5,557

PV Total = $20,000

a.What type of lease is this? Why?

b.make the amortization schedule for the 3 years for the lessee and the lessor

c.make lessee and lessor journal entries for the three years.

d.Would an unguaranteed residual change your computations? Show all work