Please show calculations, answer ALL questions with a substantial response.

On January 1, Year 1, Burton Company leases equipment from Nelson Company for an annual PROBLEM 3-2 lease rental of $10,000. The lease term is five years, and the lessor's interest rate implicit in the Capital Lease lease is 8%. The lessee's incremental borrowing rate is 8.259 . The useful life of the equipment is Inpacatons or five years, and its estimated residual value equals its removal cost. Annuity tables indicate that the Financial Statements present value of an annual lease rental of$1 at 8% rate) is $3.993. The fair value of leased equip- ment equals the present value of rentals. (Assume the lease is capitalized.) Required a. Prepare accounting entries required by Burton Company for Year 1. b. Compute and illustrate the effect on the income statement for the year ended December 31, Year 1, and for the balance sheet as of December 31, Year 1. c. Construct a table showing payments of interest and principal made every year for the five-year lease term. d. Construct a table showing expenses charged to the income statement for the five-year lease term if the equip- CHECK Interest is $2,649.95 for Year 2 ment is purchased. Show a column for (1) amortization, (2) interest, and (3) total expenses. e. Discuss the income and cash flow implications from this capital lease