Selected present aleators are so Prot 21-5 11.158117 02. (Lessee-Lessor Entries, Finance Lease with a Guaranteed Residual Value Claus Leasing Company to lease equipment to Jensen Corporation Lanuary 1.2017. The following information relates to the lease agreemen 1. The term of the lease is 7 years with morenewal option, and the mad the lease is 7 years with no renewal option, and the machinery has an estimated economic We al 9 years 2 The cost of the machinery is 5525.000 and the fair value of the asset on Lanuary 1, 2017, is $700,000 3. At the end of the lease term, the asters and has a dual value of SSO estimates ad paced residual value at the end of the lease term will be $50.00. Jornamente on a straight-line basis. The lease agreement requires usual annual rental payments, besinning on January 1, 2017 N 5. The collectibility of the lease payments is probable. 's intimental borrowing rate is 6, and the lessor's implicit Glaus desires a 5% rate of retum on its investments, Lon rate is unknown. Instructions (Assume the accounting period ends on December 31.) (a) Discuss the nature of this lease for both the lessoe and the lessor. (b) Calculate the amount of the annual rental payment required (c) Compute the value of the lease liability to the lesse. (d) 'repare the journal entries Jensen would make in 2017 and 2018 related to the case arrangement (e) Prepare the journal entries Glaus would make in 2017 and 2018 related to the lease rangement (f) Suppose Jensen expects the residual value at the end of the lease term to be 540.00 hut still guarantees a residual of $50,000. Compute the value of the lease liability at lease commencement d. Tune Tasce with Guaranteed Residual Value) Amirante Inc. Selected present aleators are so Prot 21-5 11.158117 02. (Lessee-Lessor Entries, Finance Lease with a Guaranteed Residual Value Claus Leasing Company to lease equipment to Jensen Corporation Lanuary 1.2017. The following information relates to the lease agreemen 1. The term of the lease is 7 years with morenewal option, and the mad the lease is 7 years with no renewal option, and the machinery has an estimated economic We al 9 years 2 The cost of the machinery is 5525.000 and the fair value of the asset on Lanuary 1, 2017, is $700,000 3. At the end of the lease term, the asters and has a dual value of SSO estimates ad paced residual value at the end of the lease term will be $50.00. Jornamente on a straight-line basis. The lease agreement requires usual annual rental payments, besinning on January 1, 2017 N 5. The collectibility of the lease payments is probable. 's intimental borrowing rate is 6, and the lessor's implicit Glaus desires a 5% rate of retum on its investments, Lon rate is unknown. Instructions (Assume the accounting period ends on December 31.) (a) Discuss the nature of this lease for both the lessoe and the lessor. (b) Calculate the amount of the annual rental payment required (c) Compute the value of the lease liability to the lesse. (d) 'repare the journal entries Jensen would make in 2017 and 2018 related to the case arrangement (e) Prepare the journal entries Glaus would make in 2017 and 2018 related to the lease rangement (f) Suppose Jensen expects the residual value at the end of the lease term to be 540.00 hut still guarantees a residual of $50,000. Compute the value of the lease liability at lease commencement d. Tune Tasce with Guaranteed Residual Value) Amirante Inc