Aanuary $1,2024,$ Cafe Med leased restaurant equipment from Crescent Corporation under a nine$-$year lease agreement.

The lease agreement specifies annual payments of $$34,000$ beginning January $1,2024,$ the beginning of the lease, and on each December $31$ thereafter through $2031.$

The equipment was acquired recently by Crescent at a cost of $$261,000($its falr value$)$ and was expected to have a useful life of $13$ years with no salvage value at the end of its life. Crescent records depreciation using the straight$-$iline method.

Because the lease term is only nine years, the asset does have an expected residual value at the end of the lease term of $$63,196.$

Crescent seeks a $8\%$ return on its lease investments.

By this arrangement, the lease is deemed to be an operating lease.

Note: Use tables, Excel, or a financlal calculator. $($FV of $$1.$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Required:

What will be the effects of the lease on Crescent's $($lessor$\text{'}$s$)$ earnings for the first year $($ignore taxes$)?$

Note: Enter decreases with negatlve sign.

What will be the balances in the balance sheet accounts related to the lease at the end of the first year for crescent $($ignore taxes$)?$

Note: For all requirements, round your intermedlate calculatlons to the nearest whole dollar amount.

Effect on earnings

Equipment balance $($net$,$ end of year$)$

Deferred lease revenue