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Exercise 3-Leases [20 minutes; 16 points) On January 1, 2021 BHC Corporation, a manufacturer of equipment, enters into a lease of specialized equipment with Sussex

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Exercise 3-Leases [20 minutes; 16 points) On January 1, 2021 BHC Corporation, a manufacturer of equipment, enters into a lease of specialized equipment with Sussex Corp. The lease contains no renewal or purchase options. The lessor classifies the equipment as inventory prior to the lease arrangement. The following information pertains to the lease. . Lease term: 4 years Economic life of the leased equipment: 4 years Annual lease payments: $360,000 Payment date: on Jan 1, 2021 and at Dec 31, 2021, 2022, and 2023 BHC Corp's carrying value of the leased equipment: $810,000 Rate Implicit in the lease (known by lessee): 8% . . Required (Show all your calculations to receive full points): 1. Determine the classification of the lease to BHC Corporation. [2 points) 2. Provide all journal entries relating to the lease for BHC Corporation for 2021. Round your answers to the nearest whole dollar. 17 points) 3. Provide all journal entries relating to the lease for Sussex Corp. for 2021. 17 points) Exercise 4 - Equity (20 minutes; 12 points) Shown below in T-account format arushe changes affecting the retained earnings of Brenner Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 105 million common shares, $1 par per share. Retained Earnings $ Hatirement of 5 million common shares for $22 s 90,000,000 beginning balance 2,000,000 88,000,000 Net Income Cash dividendo per than $ 33,000,000 Dedert and distribution of No dividend S 20,000,000 15 123,000,000 Ending balance Required (show all the calculation to receive full points): 1. From the information provided by the account changes you should be able to re-create the transactions that affected Brenner-Jude's retained earnings during 2018. Reconstruct the journal entries which can be used as spreadsheet entries in the preparation of a statement of cash flows. Also indicate any investing and financing activities you identify from this analysis that should be reported on the statement of cash flows

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