Gustin Corp manufactures, sells, and leases medical equipment.Gustin Corp agrees to lease 3 CAT scanners, 2 MRIs, and 2 surgicalRobots to Murray Hospital. The cost for Gustin to manufacture is5,000,000. The lease term is eight years and requires eight leasepayments of 1,800,000 each. Gustin expects the equipment to beworth 2,000,000 at the end of the lease but non of that amount isguaranteed by Murray hospital.

The lease begins on January 1, Year 1 and will last throughDecember 31, Year 8. The first Lease payment of 1,800,000 is due onJanuary 1, Year, 1 the next payment is due on December 31 year 1and the remaining payments will continue on December 31 every yearuntil the last one on December 31, Year 7. At the end of the leaseterm on December 31 Year 8 the medical equipment will be returnedto Gustin Corp.

Both companies have December 31 fiscal year end. The implicitrate in the lease is 11 percent and Murray hospital is aware ofthat rate.

1.) what kind of lease is this for Gustin Corp and for MurrayHospital?

2.)Record the lease on the books for both the lessee and thelessor at the inception of the lease on January 1, year 1.

3.)prepare the amortization table for the lessor

4.) prepare the amortization table for the lessee

5.) Prepare journal entries for the first cash payment onJanuary 1, year 1 for both the lessee and lessor.

6.) Provide any journal entries for the lessee and the lessorduring year 1 including the second cash payment on December 31,year 1 for both the lessee and the lessor.

7 .)Provide all journal entries for the lessee and the lessorduring year 5.

8.) What amounts would the lessee and the lessor report on theirincome statement and on the balance sheet for year 5

9.) prepare all necessary entries on the books of the lessor andlessee at the termination of the lease on December 31, Year 8assuming that the actual residual value of the equipment at thetime is: A) 2,000,000 B) 3,000,000 C) 1,000,000