Big Little Co. leases equipment from John Deere on 1/1/2021. The lease term is 3 years, and payments of $174,861 are due on January 1 of each year. The equipment has no residual value at the end of the lease term. The present value of the three lease payments at the commencement of the lease is $500,000. Big Little's incremental borrowing rate is 8% and John Deere's desired rate of return is 5% (known for both the lessee and lessor). This lease has been classified as a Finance Lease. a. What entries will Big Little record on 1/1/2021 ? b. What entries will Big Little record on 12/31/2021