Sh16Please help me. Solution Thankyou Wildhorse Company leases a building to Windsor, Inc. on January 1, 2025. The following facts pertain to the lease agreement.1.2.3.4.5.The lease term is 5 years, with equal annual rental payments of $3,413 at the beginning of each year.Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of aspecialized nature.The building has a fair value of $18,500, a book value to Wildhorse of $8,325, and a useful life of 6 years.At the end of the lease term, Wildhorse and Windsor expect there to be an unguaranteed residual value of $3,810.Wildhorse wants to earn a return of 5% on the lease, and collectibility of the payments is probable. Windsor was unaware ofthe implicit rate used in the lease by Wildhorse and has an incremental borrowing rate of 6%.Click here to view factor tables.How would Wildhorse (lessor) and Windsor (lessee) classify this lease?Wildhorse would classify the lease as aWindsor would classify the lease as a financeLease receivable$sales-typeHow would Wildhorse initially measure the lease receivable, and how would Windsor initially measure the lease liability and right-of-use asset? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places,e.g. 5,275.)Present value of rental payments $Lease liability/Right-of-use asset $lease.lease.WildhorseWindsor177621477714377

Introduction At the conclusion of the lease period in a finance leasing arrangement,…

Click here to view factor tables. How would Wildhorse (lessor) and Windsor (lessee) classify this lease? Wildhorse would classify the lease as a Windsor would classify the lease as a sales-type finance lease. lease. How would Wildhorse initially measure the lease receivable, and how would Windsor initially measure the lease liability and right-of- use asset? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275.)