Question 3 (6 marks) Adriano Corp. (Adriano) is a publicly accountable entity that manufactures high-end gazebos. In order to streamline the manufacturing of the steel frame for its gazebos, Adriano has entered into a lease agreement with Allpat Leasing (Allpat). Allpat will custom build a machine to manufacture the frames and will then lease the machine to Adriano. The machine was ready to be leased on December 31, 2018, and the residual value at the end of the lease will be essentially $0, as the machine will be of NO use to anyone else due to the customization. The terms of the lease are as follows: Six years with ownership reverting Lease term to Allpat at the end of the lease. $101,224 per year paid each December 31, starting on Lease payments December 31, 2018. This amount includes $2,000 of maintenance costs to be paid by Adriano. Fair value of equipment $508,000 Residual value (guaranteed) $ 20,000 Adriano's incremental borrowing rate 6% Allpat's implicit interest rate (known to Adriano) 8% Estimated useful life Nine years Adriano has correctly determined this to be a finance lease. Required: Prepare the journal entries for Adriano to record the initial lease and all the journal entries for the year ended December 31, 2019. (6 marks)