On Jan. 1,2017 Royal Co. (lessor) leased equipment to Eastern Co. (lessee). The following information pertains to this lease: 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Eastern has the option to purchase the equipment for S1.000, while the expected the end of the lease is $5,000. 2. Equal rental payments are due on Jan. I of each year, beginning in 2017. 3. The Fair value of the equipment on Jan. 4. The equipment has an economic life of 7.5 years. Eastern depreciates all of its equipment on a straight-line basis. 5, Royal Co. set the annual rental 6. Collectability of lease payment by the lessor is probably. , 2017 is $150,000: the cost is S120,000. to ensure a 5% rate of return. Eastern's incremental borrowing rate is 6%, and the implicit rate of the lessor is unknown. . List the S lease criteria, and indicate whether Royal should capitalize the lease based on each criterin Show entruiatin t tuttftu murm 3. (50 points) a. McDonalds sells a quarter pounder sandwich for $3. They sell a large coffee for $1. They sell a large fries for They sell the 3 together as a Value Meal for $5. How much revenue should be recognized for: Quarter pounder $ Coffee $ Fries $ b. In the Monopoly contest at McDonalds, the top prize of $1,000,000 is always claimed. However, the 1,00 $10 are not all claimed. Based on past history there is a 70% chance that 800 prizes will be claimed 20% chance that 700 prizes will be claimed 10% chance that 600 prizes will be claimed. Suppose you have a contract that allows you to receive all prizes that are not claimed by the end of much revenue should you record?$ 015, the TSU Foundation received a donation of some land. The value of the u ac 21 2