Stealth Sky Views $($SSV$)$ is a private company that operates tourist rides from St John s$,$ Newfoundland. Tourists payfor a one$-$hour ride that takes them to Signal Hill and up the coast. Sam, the owner, has noticed a significant increase inhis rider base and is now looking at expanding by purchasing a new plane. Sam is considering several finance options$($Exhibit I $)$ and would like you, his accountant, to assist him.RequiredProvide Sam with a report that calculates each of the three financing options he has laid out, along with journal entrieswhere requested. He would ideally like to minimize the amount of cash that he is required to repay over the next threeyears in order to cover operating costs. He would also like you to comment on the advantages and disadvantages ofthe various options. You may assume that the receipt of any cash and the purchase of the plane take place on January $1$and that SSV has a December $31$ year end.Exhibit ISeaplane Financing OptionsThe plane Sam wants to buy is expected to cost $$500,000.$ The freightcharges to deliver the plane will amount to $$5,000$ and the plane isexpected to last $15$ years with proper maintenance and will have asalvage value of $$20,000.$ Sam depreciates his assets on a straight$-$linebasis. Sam would like you to provide the initial recording of theasset. You may assume that payment will be some form of loan forthis portion and that the $$5,000$ delivery will be paid in cash; in otherwords, it will not be part of the nancing. Sam would also like you toprepare the journal entry to record depreciation for the rst year.Financing Option #$1$Obtain a $$500,000$ loan from the Royal Bank of Ryan. The loanwould be repayable in ve equal principal payments plus interest onDecember $31$ of each year. The loan would carry an interest rate of$6\%.$ Sam would like to see the entry for the receipt of the loan andthe recording of the journal entries on December $31.$Financing Option #$2$Issue $$500,000$ of bonds. The bond issue would be developed with astated rate of $6\%$ and would be a $10-$year bond with interest paidsemi$-$annually on June $30$ and December $31.$ The current market ratefor a similar bond is $4\%.$ Sam would like the journal entry for thebond issue and the journal entry for the rst two interest payments.SSV would use the effective interest rate to amortize any bond dis$-$count or premium.Financing Option #$3$Issue $50,000$ common shares at $$10$ per share to private investors.Sam currently has $100,000$ common shares outstanding, with hiswife holding half and Sam holding half. He also has $5,000$preferred shares outstanding. They are all owned by his father andare cumulative, paying a dividend of $$4$ per share. For the rsttime, no dividends were paid last year. It would be expected thata $$100,000$ dividend would be declared on November $1$ of thisyear with a payment date of February $1.$ Sam would like thejournal entry for the issuance of the shares and any dividendentries for this year under the assumption the dividend doesget declared.QUESTION $2.$ Finance option $1.$Sam would like to see the entry for the receipt of the loanand the recording of the journal entries on December $31$ for each of the first two years.Question $3.$ Financing Option #$2$Sam would like the journal entry for the bond issue and the journal entry for the first two interest payments.QUESTION $4.$Financing Option #$3$Sam would like the journal entry for the issuance of the shares and any dividend entries for this year under the assumption the dividend does get declared.NOTE: when recording the dividend, please ensure you separate dividends to preferredshareholders from dividends to common shareholders.QUESTION $5.$Comment on advantages and disadvantages.For each financing option, identify at least $1$ advantage and $1$ disadvantage and explain why it is an advantage ordisadvantage to Sam in this case.Financing Option #$1-$ Bank Loan Financing Option #$2-$ Bonds Financing Option #$3-$ Issue Shares