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On January 1, 2020, Sitra Company loased equipment from National Corporation Lease payments are $100,000, payablo annually beginning on January 1, 2020 for 20 years The loase is non-cancelable The following information pertains to the agreement 1. The fair value of the equipment on January 1, 2020 is $850,000 2. The estimated economic life of the equipment was 25 years on January 1, 2020 with guarantood residual value of $25,000 3 The lease is non-renewable. At the termination of the lease, the equipment reverts to the lessor 4 The lessor's implicit rate is 10% which is known to Sitra Sitra's incremental borrowing rate is 12% (The PV of $1 for 20 periods at 10% is 0.14864 and the PV for an ordinary annuity of $1 for 20 periods at 10% is 8.51356) 5. Sitra uses straight-line method for depreciation Instructions: A) Compute the present value of minimum lease payments B) Prepare all necessary journal entries on the lessee's books for the year 2020