REQUIRED: Prepare the documents described below. You will need to make up many of the numbers used in your calculations.You will be evaluated based on the accuracy, complexity, and completeness of your answers.

ABC is a privately owned company. Due to COVID-19, 2020 has been a very busy year for ABC, As a result, the company has made some important decisions that will prepare it for sustained growth.

1. The company entered into a long term lease on new production equipment.

a. Determine a dollar amount for the lease contract as well as the lease terms. Make a list in your Word document that clearly identifies each item. Include a bargain purchase option.

b. Prepare an amortization schedule for the first three years of the lease. It is not necessary to include all years only the first three. If you wish, this may be done in Excel and pasted into your Word document.

c. Prepare the journal entries for the lessee and for the lessor, using proper journal entry format. Assume that the lessor is a publicly traded company.

d. Use specific accounting handbook sections and paragraphs to identify and discuss the type of lease for the lessee and for the lessor.