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Millet Sales Corp., a public company, is planning to acquire new computers

with a total value of $ 60,000 on January 1, 2021. They have a choice of leasing the computers for a three-year period, or purchasing them and financing the purchase by issuing a note payable. Details of the two alternative arrangements are as follows:
Lease option: Three annual lease payments of $ 22,446 due on December 31 of each year. Millet would purchase the computers at the end of the three years for $ 2.00.
Financing option: Millet would make a down payment of $ 10,000 and issue a 6%, 3-year note payable for the remaining balance, with annual blended payments of $ 18,705 required on December 31 of each year.
Instructions

-a) Is the lease arrangement an operating or finance lease? Explain your choice. Record any entry required on January 1, 2021.
-b) Prepare the amortization table for the note payable. Record any entry required on January 1, 2021.

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