On January$12015$ Adams Corporation signed a $5-$year non$-$cancellable lease for a machine. The terms of the lease called for Adams to make annual payments of $$9,968$ at the beginning of each year, starting January $12015.$ The machine has an estimated useful life of $6$ years and a $$5000$ unguaranteed residual value. The machine reverts to the lessor at the end of the lease term. Adam uses the straight$-$line method of depreciation for all its plant assets. Adam$$s incremental borrowing rate is $10\%$ and the lessor$$s implicit rate is unknow $($it is impracticable to determine$)$

a$.$

What type of lease is this? Explain

b$.$

Compute the present value of the minimum lease payments.

c$.$

Prepare all necessary journal entries for Adams for this lease through January $1,2016$