?XERC 15ES PLUS B2 Lessee Entries, Capital Lease with Unguaranteed Residual Vaiue) On January 1, 2011, Adams orporation signed a 5-year noncancelable lease for a machine. The terms of the lease calied for Adams to make annuai payments of S9,968 at the beginning of each year, starting January 1, 2011. The machine has an estimated useful life of 6 years and a $5,000 unguaranteed residual value. The machine r back to the lessor at the end of the lease term. Adams uses the straight-line method of depreciation for allof its plant assets. Adamss incremental borrowing rate is 10%, and the lessor's implicit rate is unknown. instructions (a) What type of lease is this? Explain. b) Compute the present value of the minimum lease payments e) Prepare all necessary journal entries for Adams for this lease through january 1, 2012