Graham Company leases an automobile with a fair value of $8,725 from Atom Inc., on the following terms: 1. Noncancelable term of 50 months. 2. Rental of $200 per month (at end of each month). (The present value at 1% per month is $7,840.) 3. Estimated residual value after 50 months is $1,180. (The present value at 1% per month is $715.) Graham Company guarantees the residual value of $1,180. 4. Estimated economic life of the automobile is 60 months. 5. Graham Companys incremental borrowing rate is 12% a year (1% a month). Atoms implicit rate is unknown. Instructions [Marks: 12] (a) What is the nature of this lease to Graham Company? (b) What is the present value of the minimum lease payments? (c) Record the lease on Graham Companys books at the date of inception.