Myers Company signs a lease of an equipment $240,000 for 4 years (straight-line depreciation without any salvage value) on January I and must make payments on the lease on 31 Dec, year 1, year 2, year 3, and year 4.

Interest rate is 10% per annum

a. Prepare the amortization table

b. Prepare the journal entries for Myers Company for January 1, Year 1 AND December 31, Year 1, Year 2, and Year 3, assuming this is an operating lease.

c. Repeat question b, assuming this is a capital lease.

d. Assume that Myers makes annual rental payment of $70,000. Can the company avoid listing this lease as capital lease? Explain fully.