= Homework: Week Three Question 8, E18.4 (similar to) Part 1 of 10 Oceanview Comfort, Inc. manufactures a complete line of beds, cots, and futons. Oceanview Comfort leases a spring fabricating machine from Smith Spring Company for 3 years with no renewal or purchase options. (Click the icon to view the terms of the lease.) Read the requirements. HW Score: 14.32%, 3.15 of 22 points Points: 0 of 1 (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) Save (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Requirement a. Determine the proper classification of the lease for the lessee. Before completing the requirement, identify the present value of the lease payments. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculation. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest whole dollar.) The present value (PV) of the payments due under the lease is $ Help me solve this Etext pages Requirements - More info a. Determine the proper classification of the lease for the lessee. b. Prepare the journal entries and supporting amortization tables to account for this agreement for the lessee over the lease term. Print Done The equipment has a fair value of $14,700 and title will be retained by the lessor at the end of the lease term. The economic life of the equipment is 6 years. The implicit rate in the lease is 8%. The lessee pays all maintenance to a third party, and there are no initial direct costs. There are no incentives offered by the lessor. The first annual payment is $3,600 (due January 1, Year 1) and the payment increases each year by an amount equal to $3,600 multiplied by the Producers Price Index (PPI). The PPI on the lease commencement date is 1.00 and is forecast to increase by 5% each year. The increases in the payments will be at least 5% per year. The remaining lease payments are due on December 31, Year 1 and December 31, Year 2.