Page of 6 ZOOM 6. Accounting for Lease Agreements - Lessor (16 points) On 1/1/2018, Ram Co. leases its non-specialized equipment with a fair value of $100,000 to Falcon Inc. The equipment has an estimated economic life of 10 years. Ram expects the residual value of the equipment to be $25,000 at the end of the lease. Ram secured a third party to guarantee the expected residual value. Collection of payments and guarantees are probable. The lease has a five-year term and there is no purchase or renewal option, as well as no transfer of ownership to Falcon at the end of the lease. Falcon makes lease payments of $18,000 on 1/1/2018, the lease commencement date, and December 31" of 2018, 2019, 2020, and 2021. No initial direct costs were incurred by either party. Ram's implicit rate of 7% is known to both parties. The equipment was part of Ram's inventory and had a carrying value of $75,000 Required (you will need the slides complete this problem) a. Classify the lease for the Ram, the lessor. (2 pts) b. Prepare all necessary 2018 journal entries for Ram. (8 pts) Now assume that the equipment was custom-made for Falcon. Answer parts a and b under this assumption. (6 pts)