Part $1$: Bear Associates $("$Bear$)$ entered a lease with Summer Leasing Company $("$Summer$")$ for a

piece of equipment on January $1,2023.$ Below is the key information relating to the lease:

The fair value of the equipment on January $1,2023$ is $$1,650,000.$ Summer $($Lessor$)$ paid

$$1,650,000$ to purchase the equipment.

The equipment useful life is $7$ years.

The lease term is $6$ years,

$n=6=79.$

Summer's $($lessor$)$ required rate of return is $7\%$ and is known by Bear $($lessee$).$ Bear's

$($lessee$)$ incremental borrowing rate is $8\%.$

Six payments of $$303,919$ will be made. Payments start on January $1,2023,$ and will

continue on December $31,2023,2024,2025,2026,2027.$

There is an estimated residual value at the end of the lease of $$150,000$ on the equipment.

The lessee does not guarantee any portion of this estimated residual value.

What type of lease is this and briefly explain your answer? $(2)$

blease term$/7$ usetull life $=85\%>75\%$

Finance$/$ sales type lease b$/$c its greater than $75\%$

What is the ROU$-$Asset and Lease Liability $ amount recorded by Bear $($Lessee$)$ on

January $1,2023?(2)$

Prepare the entry $($ies$)$ for Bear $($Lessee$)$ for December $31,2023(6)$

$\frac{1550049}{6}=258341\mathrm{.}5$