On January 1, 2019, Carey Inc, entered into a noncancelable lease agreement, agreeing to pay $3,398 at the end of each year for 4 years to acquire a new computer system having a market value of $9,901. The expected useful life of the computer system is also 4 years, and the computer will be depreciated on a straight-line basis with no salvage value. The Interest rate used by the lessor to determine the annual payments was 14%. Under the terms of the lease, Carey has an option to purchase the computer for $1 on January 1, 2023. See Table 6-5. (Use the appropriate factor by clicking on the Table link.) Required: a. Should Carey Inc. account for this lease as a financing lease or an operating lease? b. Prepare the horizontal model and record the journal entry that Carey Inc. should make on January 1, 2019. (Hint First determine the present value of future lease payments.) c. Prepare the horizontal model and record the Journal entry that Carey Inc. should make on December 31, 2019, to record the first annual lease payment of $3,398. (Hint Based on your answer to part b, determine the appropriate amounts for interest and principal.) Indicate the financial statement effect. d. What expenses (include amounts) should be recognized for this lease on the income statement for the year ended December 31, 2019? e. The accounting for an asset acquired under a capital lease Complete this question by entering your answers in the tabs below. Required A Required B: Required 82 Required C1 Required C2 Required D Required E Should Carey Inc. account for this lease as a financing lease or an operating lease? Financing lose Check my work mode this shows what is correct or incorrect for the work you have ompleted Return to question Answer is not complete. Complete this question by entering your answers in the tabs below. Required Requires al Required 82 Required cRequired ? Required D Required E Prepare the horizontal model that Carey Inc. should make on December 31, 2019, to record the first annual lease payment of $3,398. (Hint: Based on your answer to statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect. Do not round Intermediate calculations. Round your final anawe Anota Balance Sheet + Liabilities Lease ability Stockholders' Equity Net Income 3,398 3.398 Return to 9 Required A Required Required 2 Required a Required 2 Required Required Record the journal entry that Carey Inc. should make on December 31, 2019, to record the first annual se payment of 13,390. (Hint: Based on your answer to part b, determine the appropriate amounts for interest and principal) (no entry is required for a transaction event, select "No journal entry required in the nint account field. Do not round intermediate calculations. Round your final arewers to the nearest whole dollar amount.) No General Journal Credit 1 1 Right of use Los liability Debit 3.300 3,395 9 Required A Required 81 Required B2 Required CI Required 2 Required Required nts What expenses (include amounts) should be recognized for this lease on the income statement for the year ended December 31, 20197 (Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount.) Income statement Partial