sultan company leased machinery from Fatima Inc. on Jan 1, 2021. The lease was recorded as a finance lease and cost 60,000. Annual rentals Of 17,208 are to be paid each year end (December). The lease is for 4 years and it has no residual value. Sultan borrowing rate is 10%. The economic life is 4 vears. The first payment is Jan 1 2021. The second and subsequent payments are on 31 December (year end

a. Is this a finance lease? Explain why

b. Record the journal entry for the lessee for the initial or beginning of lease using pv of 3.48685

c. Record the journal entry for the lessor for the initial or beginning of lease d.Prepare the amortization table

e. Record the journal entry for the lessee for the first payment

f. Record the journal entry for the lessor for the first payment

g. Record the journal entry for the lessee for the second payment

h. Record the journal entry for the lessor for the second payment

i. Sultan Company has to make an amoritisation of right of use asset at 31 December 2021. Calculate the amount and prepare the journal/adjusting entries.

g. Record the journal entry for the lessee for the third payment

h. Record the journal entry for the lessor for the third payment