Elton Electronics (Use for problems 13-14) Elton Electronics leases testing equipment to Startup Corporation. The equipment is not specialized and is delivered on January 1, 2019. The fair value of the equipment is $90,000. The cost of the equipment to Elton is $85,000 and the expected life of the testing equipment is 8 years. Elton incurs initial direct costs of $10,000, which they elect to expense. The lease term for the equipment is 8 years, with the first payment due upon delivery, and seven subsequent annual payments beginning on December 31, 2019 and ending on December 31, 2025. Elton's implicit rate is 8% and they expect that collection of the eight payments of $14,500 payments is probable. Problem 13 How will Elton Electronics classify this lease? Problem 14 Prepare the journal entries for the lessor to record the commencement of the lease, the expensing of initial direct costs, and receipt of the first payment on January 1, 2019.