Question # 1: Davis Company signs a lease agreement dated January 1, 2014 that provides for it to lese heavy equipment from Speed Rental Company beginning January 1, 2014. The lease terms, provisions, and related events are as follows: The lease term is 4 years. The lease in non-cancelable and also requires annual rental payments of $ 20,000 each to be paid in advance at the beginning of each year The cost, and also fair value, of the heavy equipment to Speed at the inception of the lease is $68,036.62. The equipment has an estimated life of 4 years and has a zero residual value at the end of this time. Davis agrees to pay all executory costs. The lease contains NO renewal or bargain purchase option. Speed's interest rate implicit in the lease is 12%. Davis is aware of this rate, which is equal to its borrowing rate Davis uses the straight-line method to record depreciation on similar equipment. a. b. c. d. e. f. REQUIRED: a) Identify whether this is an Operating or Capital lease agreement b) Prepare a table summarizing the lease payments and interest expense for Davis c) Prepare the journal entries for Davis for the years 2014 and 2015