Sandhill Incorporated leases a piece of machinery to Monty Company on January 1, 2020, under the following terms. 1. The lease is to be for 4 years with rental payments of $13,608 to be made at the beginning of each year. 2. The machinery' has a fair value of $73,110, a book value of $54,560, and an economic life of 10 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $27,280. To protect against a large loss, Sandhill requests Monty to guarantee $19,210 of the residual value, which Monty agrees to do. 4. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. 5. The implicit rate is 5%, which is known by Monty. 6. Collectibility of the payments is probable. Click here to view factor tables. (a) Evaluate the criteria for classification of the lease, and describe the nature of the lease. For the lessee, it is a , and for the lessor, it is a Prepare the journal entries for Monty for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value Sandhill Incorporated leases a piece of machinery to Monty Company on January 1, 2020, under the following terms. 1. The lease is to be for 4 years with rental payments of $13,608 to be made at the beginning of each year. 2. The machinery' has a fair value of $73,110, a book value of $54,560, and an economic life of 10 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $27,280. To protect against a large loss, Sandhill requests Monty to guarantee $19,210 of the residual value, which Monty agrees to do. 4. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. 5. The implicit rate is 5%, which is known by Monty. 6. Collectibility of the payments is probable. Click here to view factor tables. (a) Evaluate the criteria for classification of the lease, and describe the nature of the lease. For the lessee, it is a , and for the lessor, it is a Prepare the journal entries for Monty for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value