Question 1 Incomplete answer Marked out of 19.00 P Flag question Reporting Finance Lease, Unguaranteed Residual-Lessee On January 1, 2020, Alex Company signed a 5-year lease contract for equipment with Abel Company. The equipment had a normal selling price of $11,000 and an estimated useful life of 6 years. Five annual payments of $2,363 are payable by Abel on January 1, beginning in 2020. The asset reverts to Alex at the end of the lease term, December 31, 2024, and is estimated to have an unguaranteed residual value on that date of $600. Alex's implicit interest rate is 6%, which is known to Abel. a. How would Abel Company classify the lease? Finance Lease Amortization Schedule Journal Entries b. Prepare an amortization schedule of the lease liability. Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule, Lease Interest Reduction of Date Payment on Liability Lease Liability Lease Liability Jan 1, 2020 Jan. 1, 2020 $ 0 $ 0 $ 0 0 Jan. 1, 2021 Jan 1, 2022 Jan 1, 2023 Jan. 1. 2024 Total $ O Question 1 Incomplete answer Marked out of 49.00 P Flag question Reporting Finance Lease, Unguaranteed Residual-Lessee On January 1, 2020, Alex Company signed a 5-year lease contract for equipment with Abel Company. The equipment had a normal selling price of $11,000 and an estimated useful life of 6 years. Five annual payments of $2,363 are payable by Abel on January 1, beginning in 2020. The asset reverts to Alex at the end of the lease term, December 31, 2024, and is estimated to have an unguaranteed residual value on that date of $600. Alex's implicit interest rate is 6%, which is known to Abel. a. How would Abel Company classify the lease? Amortization Schedule Journal Entries c. Prepare the entries for Abel Company for 2020. Note: Round your answers to the nearest whole dollar. Date Account Name Jan. 1. 2020 Dr. Cr. To record lease liability and right-of-use asset Jan. 1, 2020 To record lease payment Dec 31, 2020 o To recand interest o Dec 31, 2020 To record amortization