Northwestern Edison Company leased equipment from Hi-Tech Company on Dec. 31, 2015. Other information: Lease Term 3 years Annual Payments 3 payments of $40,000 each on Dec 31 each year. Beginning immediately. Life of asset 3 years Implicit interest rate 8% Cost of the equipment to Hi Tech is 90,000 There is no expected residual value. 1. What is the amount of the present value of future payments? 2. What type of lease is this to the lessor, Hi-Tech? Why? 3. Prepare appropriate journal entries for Hi Tech Leasing for 2015 and 2016.