Assume that on December 31, 2016, Waste Management, Inc. signs an 8-year noncancelable lease agreement to lease a building from Reyes Warehouse Company. The following information pertains to this lease agreement.

1.		The agreement requires equal rental payments of $73,530 beginning on December 31, 2016.
2.		The fair value of the building on December 31, 2016, is $465,000.
3.		The building has an estimated economic life of 10 years, a guaranteed residual value at the end of 8 years of $16,000, and an expected residual value of $9,000. Waste Management depreciates similar buildings using the straight-line method.
4.		The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.
5.		Waste Managements incremental borrowing rate is 8% per year. The lessors implicit rate is not known by Waste Management.

Prepare the journal entries on Waste Managements books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2016, 2017, and 2018. Waste Managements corporate year-end is December 31.