Uptown Inc. entered into an arrangement on January 1, 2022 to lease a machine for six years with lease payments of $67,500 each year with the first payment due immediately and January 1 of each year thereafter. There are no options to extend, terminate, or renew the lease. The lessor requires a return on its leases of this type of 5.5%, which is the same as Uptown Inc.s marginal borrowing rate.

1. Assuming that the remaining useful life of the machine is six years, the lessor purchased the machine for $337,198.30 and regularly both sells and leases this type of equipment. Which of the following journal entries should the lessor record on January 1, 2022 (not including receipt of the first lease payment)?

2. Still assuming that the asset has a remaining useful life of six years upon the start of the lease, which of the following journal entries should the lessee recorded on December 31, 2022?

3. Assuming that the lease was instead most appropriately classified as an operating lease, Billy should record what amortization expense for the year ending December 31, 2022?