Please answer the steps this is all 1 Question. Will Upvote!!! On January 1 of Year 1, Lessee Inc. leased equipment at an annual payment of $255,297, payable each January 1 for four years, with the first payment due immediately. The equipment had a fair value of $1,200,000 and a book value of $1,125,000, and was commonly purchased or leased by customers. The lessor estimates that the equipment has an estimated useful life of eight years and an estimated residual value of $375,000, not guaranteed by the lessee. Lessor's implicit rate is 7.5%, which is unknown to the lessee. The lessee's incremental borrowing rate is 8%. The lease does not contain a purchase option or a renewal option. The lessee had no other costs associated with this lease.

Required

a. How would Lessee Inc. classify the lease?

Operating Lease

Lease Liability Schedule

Right-of-Use Asset Schedule journal Entries

b. Prepare a schedule of the lease liability for the 4-year lease term.

Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule.

C. Prepare a schedule of the right-of-use asset for the 4-year lease term.

Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule.

d. Prepare the entries for Lessee Inc. on January 1 and December 31 of the first two years of the lease term, assuming Lessee Inc.'s accounting year ends December 31.

Note: Round your answers to the nearest whole dollar.

all information necessary is provided

OnjMnuary 1 of Year 1, Lessee inc leased cqupment at an annual payment of 5255297 . payable ach january 1 for four jeari, with the first pagrnent due anineducel. The equipment had a fair value of $1,200,000 and a book value of 51,425,000 and was commonly purchared or leates by customers. The lessor eatimater that the equipment ha1 an lesseeisincrecheltal borrowing rate is fos. The lese does not consain a purchate option or a renewal boton, The lessee had no other costs asvocuted with this lease. Fequired a. How woud wessee Inci ciasuly the lease? D. Prepare a schedule of the iease labbey for the syear kaver term. b. Prepare a schedule of the lease liability for the 4 -year lease term. - Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. c. Prepare a schedule of the right-of-use asset for the 4-year lease term. - Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. d. Prepure the entries for Lessee inc on fanuary 1 and December 31 of the first two years of the lesse term, astumine Lessee inc's accounting year ends December 31 . * Note: Round your answers to the nearest whole dolar