Question 25 (17 points) Elizabeth Corporation, a manufacturer of equipment, enters into a lease of specialized equipment with Essex Corp on January 1, 2020. Title to the asset remains with Elizabeth Corp upon lease expiration. Essex Corp does not guarantee the residual value of the specialized equipment at the end of the lease term, and the lease contains no renewal or purchase options. The lessor classifies the equipment as inventory prior to the lease arrangement. The following information pertains to the lease, Lease term: 5 years Economic life of the leased equipment: 6 years Annual lease payments: $2,416 Payment date: Annually on Jan. I starting on Jan. 1.2020 Fair value of the leased equipment: $11,440 . Elizabeth Corp's carrying value of the leased equipment: $9,900 Rate implicit in the lease (known by Essex Corp): 6% Unguaranteed residual value of the equipment at the end of the lease: 5880 Required: (Round your answers to the nearest whole dollar) a. Determine the classification of the lease to Elizabeth Corporation b. Provide all journal entries relating to the lease for Elizabeth Corporation for 2020 and 2021. c. Determine the classification of the lease to Essex Corp. d. Provide all journal entries relating to the lease for Essex Corp for 2020 and 2021. MacBook Pro - A & a W * $ 4 % 5 6 8 9 U C O E OC T Y F G H D J K V C B N EM