LEASES Northwestern Edison Company leased equipment from Hi-Tech leasing on January 1, 2009. manufactured the equipment at a cost of $90,000 Hi Tech Other information: Lease term Annual payments Life of asset Fair value of equipment Implicit and incremental interest rate PV, ordinary annuity, 3 periods, 8% PV, annuity due, 3 periods, 8% 3 years $40,000 on January 1, each year 3 years 111,332 8% 2.5771 2.7833 Applying the 5 classification criteria, how should the lessee and the lessor classify the lease Prepare the amortization schedule for the first two years Prepare the appropriate journal entries for both the lessee and the lessor for the first two years