Blue Corporation leases equipment from Falls Company on January 1, 2017. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipments 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. The annual lease payment is $37,000 at the beginning of each year, and Kingstons incremental borrowing rate is 5%, which is the same as the lessors implicit rate. Prepare all the necessary journal entries for Falls Company (the lessor) for 2017, assuming the equipment is carried at a cost of $232,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
1/1/17
12/31/17
	(To record the recognition of the revenue each period)
12/31/17
	(To record depreciation expense on the leased equipment)

Please Show all work. Especially calculating PV factor. thank you in advance