Instructions: A What is the type of this lease to Adliya Company? Explain why B. Prepare an amortization schedule through the years 2021 and 2022 that would be suitable for the bes C. Prepare the necessary journal entries in the books of Adliya Company during 2020, and January 1, 2011, ofert the S expenses related to this lease. Assume that the lessee's annual accounting period ends on December 31 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) Arial 10pt 44 On January 1, 2020, Adliya Company signs a 4-year lease contract to lease an equipment from Gulf Company The lease agr According to the agreement, the lessee is required to make annual restal payment of $480,000 begg from Jary 1, 2020 The provision 1. The estimated economic life of the equipment is 5 years 2. At the inception of the lease, the fair value of the equipment is $1,680,000 3. Each annual rental payment includes $28,975 44 of executory costs relating to property taxes 4 The lessee's incremental borrowing rate is 10%. The lessor's implicit rate is 876 and is known to the l 5. At the end of the lease term, the equipment will revert to the lessor, and at that time the epopment is expected to have and al vale of 16 se 6. Both, Adliya Company and Gulf Company, use the straight-line method for depreciation Additional information: The present value of an Ordinary Annuity of $1 and the present value of an Annuity Due of $1 for 5 perods at 8% 9% and 10% are a fallows The present value of an Annuity Due of $1 Period 8% 946 1094 1 1.00000 1.00000 1.00000 2 1.92593 1.91743 1.90909 3 2.78326 2.75911 2.73554 3.57710 3.53129 3.48685 4.31221 4.23972 4.16987 On January 1, 2020, Adliya Company signs a 4 year lease contract to lease an oqpment from Calf Company According to the agreement, the lessee is required to make anal rental pay of $480,000 provisions 1. The estimated economic life of the equipment is 5 years 2 At the inception of the lease, the fair value of the equipment is $1,680,000 3. Each annual rental payment mcludes $28,975 44 of executory costs relating to property la 4 The lessee's incremental borrowing rate is 10% The lessor's implicit rate % and is knows to the les 5 At the end of the lease term, the equipment will revert to the lessor, and at that tame the eppest as expected to have und of 300 6. Both, Adliya Company and Gulf Company, use the straight line method for deprecatio Additional information: The present value of an Ordinary Annuity of $1 and the present value of an Annuity Doe of $1 for 5 penods at 8% 9% and 10% a fellows The present value of an Annuity Due of $1 Period 8% 996 10% 100000 1.00000 1.00000 2 1.92593 1.91743 190909 3 2.78326 2.75911 2.73554 3.57710 3.53129 3.48685 4.31221 4.23972 4.16987 Instructions: A What is the type of this lease to Adliya Company? Explain why B. Prepare an amortization schedule through the years 2021 and 2022 that would be suitable for the les C. Prepare the necessary journal entries in the books of Adleys Compay during 2020, and Jury 1, 2015, the expenses related to this lease. Assume that the lessee's annual accounting period ends on December 11 TO (Mac)