Presented below is a list of costs and expenses usually incurred by barnum corporation, a manufacturer of furniture, in its factory. classify the below items into the following categories: (a) direct materials, (b) direct labor, and (c) manufacturing overhead. item category 1. salaries for assembly line inspectors. 2. insurance on factory machines. 3. property taxes on the factory building. 4. factory repairs. 5. upholstery used in manufacturing furniture. 6. wages paid to assembly line workers. 7. factory machinery depreciation. 8. glue, nails, paint, and other small parts used in production. 9. factory supervisors’ salaries. 10. wood used in manufacturing furniture.

On january 1, 2018, wetick optometrists leased diagnostic equipment from southern corp. which had purchased the equipment at a cost of $2,256,342. the lease agreement specifies six annual payments of $490,000 beginning january 1, 2018, the beginning of the lease, and at each december 31 thereafter through 2022. the six-year lease term ending december 31, 2023 (a year after the final payment), is equal to the estimated useful life of the equipment. the contract specifies that lease payments for each year will increase on the basis of the increase in the consumer price index for the year just ended. thus, the first payment will be $490,000, and the second and subsequent payments might be different. the cpi at the beginning of the lease is 120. southern routinely acquires diagnostic equipment for lease to other firms. the interest rate in these financing arrangements is 12%. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) prepare the appropriate journal entries for wetick and southern to record the lease at its beginning.