Lessor enters into an agreement with Lessee on January 1, 2019, for a 5-year lease contract of a machine. The machine has 7-year estimated economic life. Lessor's cost and selling price are both $112,870. Lessor interest rate is 11%; Lessee's rate is 12%, and Lessee is aware of Lessor's rate. The lease contract has a guaranteed residual value of $7,000 at the end of the lease term. Lessee will have to make lease payment at the beginning of each year. There are no uncertainties regarding the collections and there are no further costs to be incurred by the Lessor. Both Lessor and Lessee use straight-line depreciation method. Instructions: From Lessor's perspective (a) Calculate the annual lease rental. (b) What type of lease is this? Why? (c) Prepare the lease amortization table for the first three years. (d) Prepare all the journals related to the lease for the first year