On January 1, 2020 Justify Co. signs an agreement with Lex enterprises to lease computer equipment. The term of the lease is 3 years, and payments are due on the December 31 of each year. The equipment has a fair value of $400,000, a residual value of $20,000 and 3 year economic life, and the cost to Lex was $350,000. Justify has the option to purchase the equipment for $20,000 at the end of the lease, but it is not certain that they will do so, and they do not guarantee the residual value. Justify's incremental borrowing rate and Lex's desired return are both 5%. The present value factor of $1 over 3 periods at 5% is 0.86384 , present value of an ordinary annuity for 3 periods at 5% is 2.72325 , and the present value of an annuity due for 3 periods at 5% is 2.85941 . This computer equipment is not specialized to Justify's needs and there are alternative uses for it. Which of the following tests would indicate that this lease should be classified as a finance (sales- type) lease? (hint: assume that all information is included above, i.e. there is not bargain purchase unless it is stated) Transfer of ownership test. Bargain Purchase option test. Present Value test.| Lease Term test. Alternative Use Test. Compute the annual lease payment amount that Lex will charge Justify based on the information above? How much sales revenue will Lex recognize in 2020 ? What will be Lex's cost of goods sold for 2020? Record the entry to be made on 1/1/20 for Lex. Record the entry to be made on 12/31/20 by Lex. What journal entry will be made by Justify on 1/1/20 ? What journal entries will be made by Justify on 12/31/20 ? If this were an operating lease, how would the entries made by Justify on 1/1/20 and 12/31/20 differ