Bramble Corporation leased equipment to Marin, Inc. on January 1, 2017. The lease agreement called for annual rental payments of $1,122 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $7,700, a book value of $5,700, and Bramble expects a residual value of $5,200 at the end of the lease term. Bramble set the lease payments with the intent of earning a 5% return, though Marin is unaware of the rate implicit in the lease and has an incremental borrowing rate of 7%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature.

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Prepare all necessary journal entries for Marin in 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit To record the lease) (To record lease liability) 12/31/17 How would the measurement of the lease liability and right-of-use asset be affected if, as a result of the lease contract, Marin was also required to pay $500 in commissions, prepay $800 in addition to the first rental payment, and pay $200 of insurance each year? (Round answers to O decimal places, e.g. 5,275.) Lease liability Right-of-use-asset Suppose, instead of a 3-year lease term, Marin and Bramble agree to a one-year lease with a payment of $1,122 at the start of the lease. Prepare necessary journal entry for Marin in 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)