Lam Ltd. is a publicly accountable entity. On December 31, 20x7, the entity entered into an agreement to lease heavy machinery. Details of the lease agreement are as follows:
Fair value of heavy machinery	$950,000
Useful life	10 years
Lease term	8 years
Unguaranteed residual value at end of lease term	$110,000
Required –
a)    Calculate the annual lease payment assuming that the lessor requires a 6% rate of return. Assume the first lease payment is on December 31, 20x7. b)    Prepare all journal entries relative to this lease on the lessee’s books for the years 20x7, 20x8, and 20x9. c)    How would the lease obligation at December 31, 20x9 be classified on Lam Ltd.’s Statement of Financial Position?