• PROBLEM No. 1 – FINANCE LEASE, FIXED LEASE PAYMENT Cancun Inc. leases a new crane to Abriendo Construction under a 5-year non-cancelable contract starting January 1, 2019. Terms of the lease require payments of P50,000 each January 1, starting January 1, 2019. Cancun will pay insurance, taxes, and maintenance charges on the crane, which has an estimated life of 12 years, a fair value of P240,000, and a cost to Cancun of P240,000. Both Cancun and Abriendo adjust and close books annually at December 31. Abriendo’s incremental borrowing rate is 9%, and Cancun’s implicit interest rate of 2% that is not known to Abriendo. Assume straight- line depreciation and residual value P15,000. 1. Identify the type of lease involved. 2. Prepare all the entries related to the lease contract and leased asset for the year 2019 for the lessee and lessor.