Lessee co. and Lessor Itd. Both follow IFRS. Jan 1, 2020, they enter into a lease agreement in which the lessee agreed to lease equipment for 7 years and to assume all costs and risks of ownership. The lease is effective Jan 1, 2020, and requires annual rental payments each January, starting Jan 1, 2020. Lessee's incremental borrowing rate is 7%, and the implicit interest rate used by lessor Itd is 7% and known to the lessee. The equipment was purchased by the lessor on this day Jan 1, 2020, for $1,095,047 paid cash by the lessor. The equipment's useful life is 10 years, and the estimated residual value is $32,500 guaranteed. Lessee and Lessor depreciate similar equipment using the straight-line method. At the end of the lease, there is a bargain purchase option amounting to $25,000. Collectability of lease payments is assured, also there is assurance that the lessee will exercise the bargain purchase option. At the end of the lease term, the lessee will assume the title of the equipment. Lessee and Lessor's year-end is Dec 31, of every year. Instructions: Assuming this is a Finance (capital), (Right for use asset) type lease for the Lessor and Lessee: (Round all your calculations to the nearest $) 1. Calculate the minimum lease payment (MLP) that will be charged by the lessor. 2. Prepare the Lessor Journal entries as of Jan 1, 2020 (show your calculation) 3. Prepare the Lessee Journal entries as of Jan 1, 2020 (show your calculation) 4. Prepare the journal entries for the lessor as of Dec 31, 2020 5. From the information, you have calculated and recorded, identify all balances related to the lease that would be reported on the Lessee Balance sheet on Dec 31, 2021