Reporting Finance Lease, Purchase Option-Lessee On January 1, 2020, lessor Marcy and lessee Lenox contract for the lease of a machine for five payments of $11,900 each. The $11,900 payments are to be paid at the end of each year. They also agree that at the time of the fifth payment, for an added $10,200 purchase option payment, Lenox can buy the property. Lenox reasonably expects to exercise the purchase option as the amount is well under the expected fair value at that time. Lenox's incremental borrowing rate is 6% per year and Lenox is unaware of the implicit rate of the lease. The economic life of the asset is six years. a. How would Lenox classify the lease? b. Compute the value of the lease liability. $ Amortization Schedule Journal Entries c. Prepare an amortization schedule of the lease liability. Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Note: Include any net rounding difference to Lease Liability in the Interest on Liability amount for Dec. 31, 2024. Interest Reduction of on Liability Lease Liability Lease Liability $ Lease Date Payment Jan. 1, 2020 Dec. 31, 2020 $ Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 $ Dec. 31, 2024 Total $ $ $