Addison Company signs a lease agreement dated January 1, 2016 for equipment from Luke Rental Company beginning January 1, 2016. The following information relates to the capital lease: 1) The lease term is 5 years, the lease is noncancelable and requires annual payments of $25,000 to be paid in the beginning of each; year. 2) The cost and fair value of the equipment is $102,561. The equipment has an estimated life of 5 years and zero residual value. 3) Addison agrees to pay all executory costs. 4) There is no renewal or bargain options 5) Luke's interest rate is implicit to the lease at 11%. Addison is aware of this rate, which is equal to its borrowing rate. 6) Addison uses the straight line method to record depreciation. 7) Executory costs paid at the end of year by Addison are: 2016 2017 Insurance $1,250 Insurance $1,150 Taxes, property $ 250 Taxes, property $ 225 Date Lease Payment Required 10% on Obligation Balance Balance of Obligation Jan. 1, 2016 $ 102,561 Jan. 1, 2016 $25,000 77,561 Dec. 31, 2016 8,532 86,092 Jan. 1, 2017 25,000 61,092 Dec. 31, 2017 6,720 67,813 Jan. 1, 2018 25,000 42,813 Dec. 31, 2018 4,709 47,522 Jan. 1, 2019 25,000 Dec. 31, 2019 22,522 2,477* 25,000 Jan. 1, 2020 25,000 0 Jan. 1, 2018 25,000 42,813 Dec. 31, 2018 4,709 47,522 Jan. 1, 2019 25,000 22,522 Dec. 31, 2019 2,477* 25,000 Jan. 1, 2020 25,000 *rounded Required: Prepare the journal entries for Addison for the years 2016 and 2017. Edit View Insert Format Tools Table 12pt Paragraph BIUAT