Question 2 -Lessee Accounting On May 1, 2021, Star Company leased a machine from Cloud Corporation. Under the terms of thecontract, annual lease payments are due on May 1 of each year, starting May 1, 2021. At the end of the lease term, the leased asset reverts back to Cloud Corporation. Star Company has a December 31 year end and follows ASPE. Other terms of the lease are as follows: Annual lease payment amount Amount of residual value guarantee made by Star Company Fair value of machine at inception of the lease. Fair value of machine at end of asset's economic life Lease term (in years) Estimated useful life of the machine (in years). Star Company's incremental borrowing rate: Interest rate implicit in the lease (this rate is known to Star Company) Required: $ $ $ 33,432 9,300 231,800 4,341 8 10 1. Calculate the present value of the minimum lease payments from the perspective of Star Company. 8% 7% 2. What kind of lease is this to Star Company? Why? Your answer should address all criteria that may be used to determine the type of lease. 3. Prepare an amortization schedule covering the first 3 lease payments. 4. Prepare any journal entries required for the Star Company on each of the followingdates: May 1, 2021 December 31, 2021 May 1, 2022