FairfieldCoporation (lessee)enters into a lease agreement with RobertsLeasing Company (lessor) on January 1, 2021, for equipment. The following data are relevant to the lease agreement:

1. The term of the noncancelable lease is 4 years. Payments of $978,446 are due on December31 of each year. The first payment is due on January 1, 2021.

2. The fair value of the equipment on January 1, 2021, is $3,500,000. The equipment has an economic life of 6 years with nosalvage value.

3. The lessee is aware that the lessor used an implicit rate of 8% in computing the lease payments

Fairfield Coporation (lessee) enters into a lease agreement with Roberts Leasing Company (lessor) on January 1, 2021, for equipment. The following data are relevant to the lease agreement: 1. The term of the noncancelable lease is 4 years. Payments of $978,446 are due on December 31 of each year. The first payment is due on January 1, 2021. 2. The fair value of the equipment on January 1, 2021, is $3,500,000. The equipment has an economic life of 6 years with no salvage value. 3. The lessee is aware that the lessor used an implicit rate of 8% in computing the lease payments Round all answers to the nearest whole dollar. 1. How should the lease be classified by the lessee and by the lessor. Explain your answer. 2. Compute the present value of the lease. Use Excel formula. PV = 3. Prepare Amortization Schedule (you can add or delete rows as needed) Principle reduction Outstanding Balance Date Cash Payment Effective Interest 3. Prepare Amortization Schedule (you can add or delete rows as needed) Principle reduction Outstanding Balance Date Cash Payment Effective Interest 4. Prepare ALL journal entries for both the lessee and the lessor on the following dates. Add rows if needed. Fairfield Corporation Roberts Leasing Company January 1, 2021 December 31, 2021 5. What revnues/expenses and amounts wiil the lessee and the lessor report on their income statements? Lessee Lessor