Use the following information to answer questions 6-8. Alt Corporation enters into an agreement with Yates Rentals Co. on January 1, 2018 for the purpose of leasing a machine to be used in its manufacturing operations. The following data pertain to the agreement (a) The term of the noncancelable lease is 3 years with no renewal option. Payments of $574,864 are due on January 1 of each year. (b) The fair value of the machine on January 1, 2018, is $1,600,000. The machine has a remaining economic life of 10 years, with no salvage value. The machine reverts to the lessor upon the termination of the lease. (c) Alt depreciates all machinery it owns on a straight-line basis (d) Alt's incremental borrowing rate is 10% per year. Alt does not have knowledge of the 8% implicit rate used by Yates (e) Immediately after signing the lease, Yates finds out that Alt Corp. is the defendant in a suit which is sufficiently material to make collectibility of future lease payments doubtful. 6. What type of lease is this from Alt Corporation's viewpoint? a. Operating lease b. Capital lease c. Sales-type lease d. Direct-financing lease 7. From the viewpoint of Yates, what type of lease agreement exists? a. Operating lease b. Capital lease c. Sales-type lease d. Direct-financing lease N E 8. Which of the following lease-related revenue and expense items would be recorded by Yates if the lease is Focus op as 8. Which of the following lease-related revenue and expense items would be recorded by Yates if the lease is! accounted for as an operating lease? a. Rent Revenue only b. Interest Revenue only c. Depreciation Expense only d. Rent Revenue and Depreciation Expense Exercise 1 On January 2 2018 Gold Star Leasing Company leases equipment to Brick Co with 5 equal annual payments of $160,000 each payable beginning January 2, 2018 Brick Co. agrees to guarantee 19 x hp a