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On 1/1/A, Lessor Co. leases equipment with an expected useful life of 9 years to Lessee Co. for a period of 7 years. The equipment has a FMV of $225,000 but cost the lessor $190,000. The annual lease payments are due each 1/1 beginning immediately. Lessor expects the equipment to have a residual value of $18,000 when it is returned, but lessee guarantees the residual value for only $5,000. Assume that lessors interest rate for leases of this type is 12%, and lessee has an incremental borrowing rate of 10%. Lessee is aware of lessor's interest rate, and lessee believes the equipment will be worth at least $6k when it is returned. a. Provide the following details from lessor's 1/1/A lease inception entry. If you feel an item below doesnt apply, place a 0 in the blank. Lease Receivable ____________ CGS ____________ Sales Revenue ____________[219119] Equipment ____________ b. Provide the following details from lessees 1/1/A lease inception entry (net method). If you feel an item below doesnt apply, place a 0 in the blank. ROUA ____________ Lease Liability ____________[216858] c. Give lessee's straight-line amortization expense for Year A (if 0, answer 0).____________[b/7] d. On 1/1/A, lessor's UIR is ____________[89984] e. Is this a finance lease? Why?

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