On January 1, 2021, Jack leased a warehouse from Luna. The lease specified annual payments of $15,000 beginning January 1, 2021, and each January 1 through 2024. Luna's rate for determining payments was 12%. At the end of the lease, the warehouse was expected to be worth $5,000. The estimated life of the warehouse is 5 years with no salvage value used in depreciation calculations. Luna and Jack use straight line depreciation. A $800 per year cleaning agreement was arranged for the warehouse with an outside service firm. During contract negotiations, Luna agreed to pay this fee and included it in the $15,000 lease payment. How should this lease be classified by Jack and Luna and why? Prepare the amortization schedules and all journal entries for both Jack and Luna.