Assume the same data as in P20–13 and that Provincial Airlines Corp. has an incremental borrowing…

Assume the same data as in P20–13 and that Provincial Airlines Corp. has an incremental borrowing rate of 8%. Instructions Answer the following questions, rounding all numbers to the nearest dollar. (a) Discuss the nature of this lease in relation to the lessee. (b) What classification will Provincial Airlines Corp. give to the lease? (c) What difference, if any, would occur in the classification of the lease if Provincial were using IFRS? (d) Using time value of money tables, a financial calculator, or computer spreadsheet functions, calculate the amount of the initial obligation under capital leases. (e) Prepare a 10-year lease amortization schedule for the lease obligation using a computer spreadsheet. (f) Prepare all of the lessee’s journal entries for the first year, assuming that the lease year and Provincial Airlines’ fiscal year are the same. (g) Prepare the entries in (f) again, assuming that the residual value of $15,000 was guaranteed by the lessee. (h) Prepare the entries in (f) again, assuming a residual value at the end of the lease term of $45,000 and a purchase option of $15,000.