On January 1, 2016, Charloff Company entered into an agreement to lease a piece of machinery from Pierre Corporation for four years. The machinery had a cost and fair value of $800,000 and a useful life of seven years. The lease called for annual rental payments on December 31 of each year, starting on December 31, 2016. At the end of the lease term, Charloff has the option to purchase the equipment for $30,000, which is significantly less than what the fair market value of the equipment will be at that time.

Charloffs incremental borrowing rate is 10% and Pierres implicit borrowing rate is 8%. Charloff is unaware of Pierres implicit rate.

Collectability of the future lease payments is reasonably predictable, and no additional costs related to the lease are expected.

Required:

1.What type of lease is this for Pierre? (Be specific and provide justification)

2.What type of lease is this for Charloff?

3.Determine the annual lease payments, as set by Pierre Corporation.

4.Determine the minimum lease payments, as calculated by Charloff.

5.Prepare the entry on the date of the lease inception for both the lessee and lessor.

6.Prepare the lessees amortization schedule for the term of the lease.

7.Prepare the entry for the first interest payment for both the lessee and lessor.

8.Prepare the entry to record depreciation expense for the asset for the year 2017, assuming that Charloff uses the straight-line method.

9.Complete parts 3-6, assuming that the lease payments are made each January 1, starting on January 1, 2016 instead of on December 31^st of each year.

Please show all calculations, thanks.

HELLO, THAT IS THE FULL QUESTION.. aNSWER AS MUCH AS YOU CAN ; THANKS