Lease Problem 1:

Good home LLC enters into a lease agreement on July 1, 2021, for equipment. Good home LLC is the lessee. The following data are relevant to the lease agreement:

1.		The term of the noncancelable lease is 4 years, with no renewal option. Payments of $858,043 are due on July 1 of each year.
2.		The fair value of the equipment on July 1, 2021 is $3,030,000. The equipment has an economic life of 6 years with no salvage value.
3.		Good home LLC depreciates similar machinery it owns on the sum-of-the-years'-digits basis.
4.		The lessee pays all executory costs.
5.		Good homeLLC 's incremental borrowing rate is 11% per year. The lessee is aware that the lessor used an implicit rate of 9% in computing the lease payments.

Required:

1. Indicate the type of lease Good home LLC has entered into and what accounting treatment is applicable.
2. Prepare the journal entries on Good home LLC's books that relate to the lease agreement for the following dates: July 1, 2021, December 31, 2021, July 1 2022 and December 31, 202 Please show all of your work in the calculations of each amount and a full lease amortization schedule.