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please show work Harper Company (lessor) agrees to lease equipment to Grove Company (lessee) on January I, 2022 , on a noncancelable lease. The following

please show work
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Harper Company (lessor) agrees to lease equipment to Grove Company (lessee) on January I, 2022 , on a noncancelable lease. The following information relates to the lease agreement. a. The term of the lease is 8 years. The equipment is expected to have an economic life of 10 years. b. At the end of the lease, the lessee has the right to purchase the equipment for $3,000. The expected residual value at the end of the lease I $6,000. c. The cost of the equipment is $620,000, and the fair value of the asset on January 1, 2022, is $860,000. d. The lease agreement requires equal annual rental payments, beginning January 1, 2022. e. The collectability of the lease payments is probable. f. Harper desires an 8% rate of return on its investments. Grove's incremental borrowing rate is 10%. The lessor's implicit rate is unknown. Instructions: 1. What type of lease is this to Grove? Why? 2. What type of lease is this to Harper? Why? 3. Calculate the amount of the annual rental payment required by the lease. 4. Prepare all necessary journal entries for Grove for 2022 . 5. Prepare all necessary journal entries for Harper for 2022. You must show all calculations using the time value of money tables to receive full credit! Use the answer sheet provided for your answer. DO NOT PUT MORE THAN ONE PROBLEM ON A PAGE

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