On Oct $1,2024,$ Burke Corporation signed a $4$ year noncancelable lease for a machine. The terms of the lease called for Burke to make annual payments of $$7,000$ on October $1$ each year beginning on $10/1/2024.$ The machine has an estimated useful life of $6$ years and a $$3,000$ bargain purchase option. The Lessors implicit rate is $10\%$ and Burke knows this rate. The equipment has a fair value of $$30,000$ and a cost of $$21,000.$ Both companies have a $\frac{12}{31}$ year end.

a$.$ What type of lease is this for each party? Show the $5$ creitsyla and answer for each.

b$.$ Prepare amortization table$($s$)$ for both Burke and the lessor. If it's the same, you can use one for both.

c$.$ Prepare all necessary journal entries for $2024-2026$ for both Burke and the Lessor. Don't forget aje at $12/31.$ Assume the lessor uses reversing entries and Burke does not use AJE.

d$.$ Prepare the $12/31/25$ balance sheet and income statement for Burke and the lessor.

e$.$ Prepare the lease end entry for both Burke and the Lessor

f$.$ Complete chart in the second sheet $($see tabs$).$

g$.$ Assume instead that the lease is considered an operating lease and that the $$3,000$ is an unguaranteed residual value. Record the journal entries for Burke and the Lessor for $2024-2025.$ AND change the lease to starting on $\frac{1}{1}\frac{?}{14}$ and payments being made on $\frac{1}{1}$ each year starting on $1/1/24$

Use this chart to answer F $($Assume these all meet the criteria for a finance lease and each is independent$)$ Put a dollar amount in each cell and Show Computations for all cells the first time you use a number.

$\backslash$table$[[,$Lessee PV for $90\%$ Test,Lessee: Intital Lease Liab,YEARS TO AMTZ ROU ASSET,Lessor PV for $90\%$ Test,Lessor Initial Lease Receivable$],[\backslash$table$[[$Annual payments of $$7,000$ with an BPO of$],[$$$3,000.($this is the scenario in the$],[$problem$)]],,,,,],[\backslash$table$[[$Annual payments of $$7,000$ at the beginning$],[$of each year and a $$3,000$ guaranteed$],[$residual value. The estimated residual value$],[$is $$2,000.]],,,,,],[\backslash$table$[[$Annual payments of $$7,000$ at the beginning$],[$of each year and a $$3,000$ guaranteed$],[$residual value and an expected residual$],[$value of $$3,000$