second question

LeBron Corporation leases equipment from Kevin company on January 1, 2019. The lease agreement does not transfer ownership, does not contain a bargain purchase option, and has a guaranteed residual value of $10,000. The lease cover 4 years of the equipment's 10-year useful life. The lease agreement is non-cancelable and requires equal rental payments of $20,000 at the beginning of each year (starting on 1/1/20). The equipment has a fair value at the commencement of the lease of $200,000. The equipment's historical cost was 5 250,000. The present value of the lease payments is $71,542. LeBron Corporation's incremental borrowing rate is 8% and it depreciates, on a straight-line basis, similar equipment that it owns. Instructions (a) Is this a nance lease or an operating lease? List the specic results of the ve classication criteria used to determine this. (b) Assuming this is a nance lease, prepare the related journal entries that should be recorded for LeBron Corporation on 111/20 and 12/31f20 (c) Assuming this is an operating lease, prepare the related journal entries that should be recorded for LeBron Corporation on 1f1/20 and 12/31/20 (d) Assuming this is an operating lease, prepare the related journal entries that should be recorded for Kevin Company on 1/1/20 and 12/31/20