Joey Co. leased equipment to Legoria Co. on April 1, 2020. The first of eight equal annual payments of $175,000 was made on April 1, 2020. The Cost of the equipment to Joey Co. is $940,000. The Cash selling price is $1,026,900. Assume year end is 12/31/2020.

1). What is Joeys desired rate of return on this lease?

2). What type of lease is this to Joey Co. Explain your answer?

3) Give the entry to record this lease on the books of Joey [4/1/20 to 4/1/2021] (Lease Amortization schedule should be prepared first)

4) How much income will Joey Co. recognize in 2020?