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Mac Leasing Company (lessor) and Ash Corporation (lessee) signed a four-year lease on January 1...

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Accounting

Mac Leasing Company (lessor) and Ash Corporation (lessee) signed a four-year lease on January 1 of Year 1. The underlying asset has an estimated life of six years and a fair value of $50,000, and the property reverts to Mac at the end of the lease term. Lease payments of $11,923 are payable on January 1 of each year beginning at the lease commencement and are set to yield Mac a return of 8%, which is known to Ash. The estimated residual value at the end of the lease term is $10,000 and is guaranteed by Ash Corporation. Ash expects the residual value at the end of the lease term to be $10,000. The lease contains no purchase option.

Required

a. How would Ash Corporation classify the lease? AnswerFinance LeaseOperating LeaseSales-Type Lease b. What is the lease liability balance on January 1, the lease commencement date? Note: Round your answer to the nearest whole dollar.

I see someone answered it but not completed put the explanation for January but missing another entry to put its's two entries to put per year

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