Question #2 South Van Limited (SVL), a December 31 year-end company, leased equipment from North Van Limited (NVL). The lease terms are as follows: SVL's lease quote received from NVL: Payments totaling $18,400 beginning each lease year with the first payment due at the time of signing Lease term: 7 years, annual payments Estimated equipment useful life: 10 years Lease start date: September 30, 2020 Purchase option at the end of lease: $8,000; well below estimated future market value for such high re-sale equipment NVL priced the lease to earn a return of 6% and estimated fair value of the equipment is $100,000. SVL's cost of capital is 5% and SVL knows the rate applied by NVL. The total annual payments of $18,400 included an amount of $2,400 for a 12 month insurance policy provided by NVL, for certain equipment damages. Round all calculation so the nearest $; no cents Required #1 SVL planned to capitalize the lease at its cost of capital (5%) but sought a second opinion from you, the company's external CPAs. Provide your comments. Required #2 Prepare entries for SVL required at September 30, 2020 and December 31, 2020. September 30: December 31: Required #3 Prepare, in good form for SVL, an excerpted Statement of Financial Position at December 31, 2020 with all accounts arising from entering into this lease. Show all supporting calculations, where applicable. Question #2 South Van Limited (SVL), a December 31 year-end company, leased equipment from North Van Limited (NVL). The lease terms are as follows: SVL's lease quote received from NVL: Payments totaling $18,400 beginning each lease year with the first payment due at the time of signing Lease term: 7 years, annual payments Estimated equipment useful life: 10 years Lease start date: September 30, 2020 Purchase option at the end of lease: $8,000; well below estimated future market value for such high re-sale equipment NVL priced the lease to earn a return of 6% and estimated fair value of the equipment is $100,000. SVL's cost of capital is 5% and SVL knows the rate applied by NVL. The total annual payments of $18,400 included an amount of $2,400 for a 12 month insurance policy provided by NVL, for certain equipment damages. Round all calculation so the nearest $; no cents Required #1 SVL planned to capitalize the lease at its cost of capital (5%) but sought a second opinion from you, the company's external CPAs. Provide your comments. Required #2 Prepare entries for SVL required at September 30, 2020 and December 31, 2020. September 30: December 31: Required #3 Prepare, in good form for SVL, an excerpted Statement of Financial Position at December 31, 2020 with all accounts arising from entering into this lease. Show all supporting calculations, where applicable