Jay Company, as lessee, enters into a lease agreement on January 1, 2020, to lease equipment. The following data are relevant to the lease agreement. - The term of the noncancellable lease is three years, with no renewal option. Payments of $12,000 are due on January 1, of each year. - The fair value of the equipment on January 1, 2020 is $35,000. The equipment has an estimated economic life of five years, and an unguarenteed residual value of $4,000. - The equipment reverts back to the lessor at the termination of the lease and is expected to have use to the lessor. - The lessee is aware that the lessor used an implicit rate of 6%. (Present Value & Future Value Tables are provided on pages 3 and 4) Instructions: 1. Indicate the type of lease Jay has entered into and why (include a list of the Capital Lease Criteria) (Present Value & Future Value Tables are provided on pages 3 and 4) 2. Prepare the journal entries on Jays books related to the lease agreement for the following dates: (round all amounts to the nearest dollar. Include a partial amortization schedule) a. January 1, 2020 b. December 31, 2020 c. January 1, 2021 Problem #2 (14 points) Calculation of lease payments Zest Company, as lessee, enters into a lease agreement on January 1, 2018, to lease equipment. The following data are relevant to the lease agreement. - The term of the noncancellable lease is three years, with no renewal option. - The fair value of the equipment on January 1, 2018 is $60,000. The estimated residual value is $0. - The equipment reverts back to the lessor at the termination of the lease. - The lessor used an implicit rate of 4%. Instructions: -Calculate the required amount of the lease payments