Sunset Company as lessee enters into a lease agreement on January 1, 2015, for equipment. The following data are relevant to the lease agreement: The term of the noncancelable lease is four years, with no renewal option. Payments of $57,365 are due each December 31, beginning on December 31, 2015. The fair value of the equipment on January 1, 2015, is $210,000. The equipment has an economic life of six years with no salvage value. Sunset employs the straight-line depreciation method. The lessee pays all executory costs. Sunset's incremental borrowing rate is 10% per year. The lessee is aware that the lesser used an implicit rate of 8% in computing the lease payments. The present value annuity factor for four periods at 8% is 3.31213: at 10% it is 3.16986. Required: (a) What kind of lease is this for Sunset Company? Give reason(s). (b) Prepare the journal entries on Sunset Company's books that relate to the lease agreement for the following dates: (Round all amounts to the nearest dollar.) 1. January 1, 2015 2. December 31, 2015. 3. December 31,2016