It is a quarterly interest rate (2%)

Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2021. Courtney purchased the equipment from Doane Machines at a cost of $250,000, its fair value. December 31 is the fiscal year end for each company. Related Information: Lease term Quarterly lease payments Economic life of asset Interest rate charged by the lessor 2 years (8 quarterly periods) $15,000 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter 5 years 80% Required: 1) Determine the lease type for Baillie Power and explain why. 2) Prepare appropriate entries for Baillie Power from the beginning of the lease through December 31, 2021. Appropriate adjusting entries are recorded at the end of each quarter. 3) What will be the effect of the lease on Baillie Power's earnings for the first year (ignore taxes)? 4) What will be the balance in the balance sheet accounts of Baillie Power related to the lease at the end of the first year (ignore taxes)