Lessor's Implicit rate (known by lessee) Lessee's incremental borrowing rate 5% 6% 5% 6% 5% 5% 5% 5% American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Bar- ton completed construction of the machine on January 1, 2018. The lease agreement for the $4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The use- ful life of the machine was expected to be four years with no residual value. Barton and Barton's impliit interest rate was 10%. Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2018. 2. Prepare an amortization schedule for the four-year term of the lease. 3. Prepare the appropriate entries related to the lease on December 31, 2018. 4. Prepare the appropriate entries related to the lease on December 31, 2020. (Note: You may wish to compare your solution to this exercise with that of E 14-18 which deals with a parallel situation in which the packaging machine was acquired with an installment note.) MacBook Pro 6