Lahiri Leasing purchased a single$-$engine plane for $$450,000$ and leased it to Maverick Flying Club for its fair value of $$771,147$ on January $1,2027.$ Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$ Terms of the lease agreement and related facts were Eight annual payments of $$135,000$ beginning January $1,2027,$ the beginning of the lease, and on each December $31$ through $2033.$ Maverick knows that Lahiri Leasing$$s implicit interest rate was $11\%.$ The estimated useful life of the plane is eight years. Payments were calculated as follows: Amount to be recovered $($fair value$)$$ $771,147$Lease payments at the beginning of each of the next eight years: $($$$771,1475\mathrm{.}7122*$Footnote asterisk$)$$ $135,000*$Footnote asteriskPresent value of an annuity due of $$1$: n $=8,$ i $=11\%$ Red Baron$$s incremental borrowing rate is $12\%.$ Incremental costs of consummating the completed lease transaction incurred by Lahiri Leasing were $$21,090.$ Required: How should this lease be classified $($a$)$ by Lahiri Leasing $($the lessor$)$ and $($b$)$ by Maverick $($the lessee$)?$ Prepare the appropriate entries for both Maverick Flying Club and Lahiri Leasing on January $1,2027.$ Prepare an amortization schedule that describes the pattern of interest expense over the lease term for Maverick Flying Club. Prepare the appropriate entries for both Maverick and Lahiri Leasing on December $31,2027($the second lease payment$).$ Both companies use straight$-$line depreciation or amortization. Prepare the appropriate entries for both Maverick and Lahiri Leasing on December $31,2033($the final lease payment$).$ Prev Question $9$ of $9$ Total$9$ of $9$ Visit question mapThis is the last question in the assignment. To submit, use Alt $+$ S$.$ To access other questions, proceed to the question map button.Next