Ravis Rent$-$A$-$Car Company leases a car to Ira Reem, an employee, on January $1,2019.$ The term of the noncancelable lease is $4$ years. The following information about the lease is provided:

Title to the car passes to Ira on the termination of the lease with no additional payment required by the lessee.

The cost and fair value of the car is $$8,400.$ The car has an economic life of $5$ years.

The interest rate implicit in the lease is $10\%.$

It is probable that Ravis will collect the lease payments.

Equal annual lease payments are due at the end of each year.

Required:

Next Level What type of lease is this to Ravis Rent$-$A$-$Car Company? Why?

Prepare a table summarizing the lease receipts and interest income earned by the Ravis Rent$-$A$-$Car for the $4-$year lease term.

Prepare the journal entries for $2019$ and $2020$ to record the lease agreement, the lease receipts, and the recognition of income on the books of