Wave Company (lessee) signed a 6 year lease agreement for equipment, beginning January 1, 2020. The required annual payment to the lessor (Hill) is $31.500, made at the beginning of each year (this includes $1.500 paid for taxes and maintenance. The first payment is made on 1/1/2020 The equipment will be returned to the lessor at the end of the lease. The equipment's estimated useful life is 7 years with no estimated salvage value). Wave's incremental borrowing rate is 6% Hill's (lessor) 5% implicit interest rate is known to Wave. The cost of the equipment to Hill is 150,630. The fair value of the equipment is equal to PV of the lease payments. Wave uses straight line depreciation on similar owned equipment. Required: a) Is this a finance or operating lease? If financing, explain one of the criteria which is most? b) Please prepare the joumal entries to record the lease and first payment on January 1, 2020, by Wave (lessee; lease inception). Lessee (Wave) entries on 1/1/2020 Debits Credits Please provide the Harsewerhetics on January 1, 2020 Lenser Hitries on 11/2010 Debits Credits c) Prepare Wave's (lessee) joumal entry or entries that should be recorded at year-end for interest accrual and the 2 payment. Interest accrual on 12/31/2020 Debits Credits Payment en 1/1/2021 Debits Credits d) Determine the amount of depreciation expense for 2020 for lessee. e) What amounts would appear on Wave's (lessee) 12/31/2020 balance sheet for the (1) leased assed and the calease liability? Account Amount 1) What amount should the lessor Hill record as accrued interest income at the end of the first year (12/31/202012 Interest Income