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M leased a machine on 11-01-19. The machines estimated useful life was 4 years. The noncancelable lease required M to make 3 monthly lease payments

M leased a machine on 11-01-19. The machines estimated useful life was 4 years. The noncancelable lease required M to make 3 monthly lease payments of $1,000 with the first monthly lease payment occurring on 11-01-19. Ms incremental borrowing rate on 11-01-19 is 2.5%. At the end of the lease, M will return the machine to the lessor. M uses the straight-line depreciation (amortization) method with no residual value and only prepares AJEs every December 31. Determine if this is a short-term or a long-term lease. If it is a long-term lease, determine if it is a long-term finance lease or a long-term operating lease. Prepare the lease-related entries M should make on:

a) 11-01-19 b) 12-01-19 c) 12-31-19 d) 01-01-20

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