Python Company leased equipment from Hope Leasing on January 1, 2021. Hope purchased the equipment at a cost of $234,385. Annual payments are $80,000, with the first payment on January 1, 2021.

Other information:

Lease term	3 years
Useful life of asset	3 years
Fair value of equipment	$234,385
Interest rate	8%
Present value of an ordinary annuity of $1 (n = 3, i=8%)	2.57710
Present value of an annuity due of $1 (n=3, i=8%)	2.78326

Required: Prepare appropriate journal entries for Python (the lessee) for 2021. Assume straight-line amortization and a December 31 year-end.

[1] What is the appropriate classification for this lease (finance/sales-type or operating)? Why?

[2] Prepare the journal entry or entries, for the lessee, necessary at the time of lease signing (January 1, 2021). If no entry is necessary, write "no entry needed".

[3] Prepare the journal entry or entries, for the lessee, necessary at the time of the first lease payment (January 1, 2021).

[4] Prepare the journal entry or entries, for the lessee, necessary at the second lease payment (December 31, 2021).

[5] If appropriate, prepare the journal entry or entries, for the lessee, necessary to "depreciate" the leased asset.