Blue Corporation enters into a 7-year lease of equipment on January 1, 2017, which requires 7 annual payments of $39,500 each, beginning January 1, 2017. In addition, Blue guarantees the lessor a residual value of $20,700 at lease-end. The equipment has a useful life of 7 years. Prepare Blue January 1, 2017, journal entries assuming an interest rate of 11%

Date	Account Titles and Explanation	Debit	Credit
January 1, 2017	enter an account title to record the lease	enter a debit amount	enter a credit amount
	enter an account title to record the lease	enter a debit amount	enter a credit amount
	(To record the lease.)
January 1, 2017	enter an account title to record first lease payment	enter a debit amount	enter a credit amount
	enter an account title to record first lease payment	enter a debit amount	enter a credit amount
	(To record first lease payment.)