On January 1, 2019, Ballieu Company leases specialty equipment wath an economic life of 8 years to Anderson Company, The lease contans the following torms and provisions: - The lease is noncancelable and has a term of 8 years. - The annual rentals are $35,000, payable at the beginning of each year. - The interest rate implicit in the loase is 14%. - Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for 51 at the end of the lesse term, December 31, 2026 - The cost of the equipment to the lessor is $150,000, and the tair value is approximately $185,100. - Ballieu incurs no material initial direct costs. - It is probable that Ballicu will collect the lease payments. - Ballieu estimates that the fair value is expected to be signilicantly greater than $1 at the end of the lease term. Balleu calculates that the present value on danuary 1,2019 , of 8 annual payments in advance of $35,000 discounted at 14% is $105,090,68 (ihe $1 purchase option is ignored as immaterial). Required: 1. Next Level /dentify the classification of the lease transaction from Ballieu's point of view. Give the reasons for your classification. 2. Prepare all the journal entries for Balliou for the years 2019 and 2020. Question not attempted. 2b. Prepare all the journal entries for Ballieu for the year 2020. Question not attempted. On January 1, 2019, Ballieu Company leases specialty equipment wath an economic life of 8 years to Anderson Company, The lease contans the following torms and provisions: - The lease is noncancelable and has a term of 8 years. - The annual rentals are $35,000, payable at the beginning of each year. - The interest rate implicit in the loase is 14%. - Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for 51 at the end of the lesse term, December 31, 2026 - The cost of the equipment to the lessor is $150,000, and the tair value is approximately $185,100. - Ballieu incurs no material initial direct costs. - It is probable that Ballicu will collect the lease payments. - Ballieu estimates that the fair value is expected to be signilicantly greater than $1 at the end of the lease term. Balleu calculates that the present value on danuary 1,2019 , of 8 annual payments in advance of $35,000 discounted at 14% is $105,090,68 (ihe $1 purchase option is ignored as immaterial). Required: 1. Next Level /dentify the classification of the lease transaction from Ballieu's point of view. Give the reasons for your classification. 2. Prepare all the journal entries for Balliou for the years 2019 and 2020. Question not attempted. 2b. Prepare all the journal entries for Ballieu for the year 2020. Question not attempted