Ivanhoe Corp. is a manufacturer of truck trailers. On January 1, 2021, Ivanhoe Corp. leases 9 trailers to Tamarisk Company under a 7-year noncancelable lease agreement. The following information about the lease and the trailers is provided:

1.		Equal annual payments that are due on January 1 each year provide Ivanhoe Corp. with an 11% return on net investment.
2.		Titles to the trailers pass to Tamarisk at the end of the lease.
3.		The fair value of each trailer is $51,100. The cost of each trailer to Ivanhoe Corp. is $47,600. Each trailer has an expected useful life of nine years.
4.		Collectibility of the lease payments is probable.

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(a)

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What type of lease is this for the lessor? Direct-financing type leaseSales-type lease

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(b)

Calculate the annual lease payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Annual lease payment

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(c) Prepare a lease amortization schedule for Ivanhoe Corp. for the first three years.

d) Prepare the journal entries for the lessor for 2021 to record the lease agreement, the receipt of the lease rentals, and the recognition of revenue (assume the use of a perpetual inventory method and round all amounts to the nearest dollar).