The capital lease was for equipment. The lease started in 2017and was a 5-year lease of annual lease payments of $50,000, starting on January 1, 2017. The lease also had a bargain purchase option for $20,000 at the end of the lease.The equipment had a useful lifeof6 years andBoarsheaduses the straight-line method of depreciation.The implicit interest rate for this lease was 6%

2.Assuming the company adopt ASU 2016-2 in 2019,what liabilities and assets will need to be reported in the 2018 and 2019comparative financial statements.

3.Assuming adoption in 2019, what journal entries will need to be made in 2019for the transition to the new leasestandard?

4.Assuming adoption in 2019, what are the new year-end (December31, 2019) adjusting entries that will needto bemade?