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: 1. Title to the car passes to Ira on the termination of the lease with no additional payment required by the lessee. 2. The cost and fair value of the car is $8,400. The car has an economic life of 5 years. 3. The interest rate implicit in the lease is 10%. 4. It is probable that Ravis will collect the lease payments. 5. Equal annual lease payments are due at the end of each year. Required: 1. Next Level What type of lease is this to Ravis Rent-A-Car Company? Why? 2. Prepare a table summarizing the lease receipts and interest income earned by the Ravis Rent-A-Car for the 4-year lease term. 3. 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 Ravis Rent-A-Car. CHART OF ACCOUNTS Ravis Rent-A-Car Company General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 433 Interest Income 122 Lease Receivable 123 Equipment Leased to Others EXPENSES 141 Inventory 500 Cost of Goods Sold 152 Prepaid Insurance 511 Insurance Expense 512 Utilities Expense LIABILITIES 521 Salaries Expense 211 Accounts Payable 532 Bad Debt Expense 231 Salaries Payable 540 Interest Expense 250 Unearned Interest 559 Miscellaneous Expenses 261 Income Taxes Payable 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings 2. Prepare a table summarizing the lease receipts and interest income earned by the Ravis Rent-A-Car for the 4-year lease term. 3a. Prepare the journal entries for 2019. 3b. Prepare the journal entries for 2020