Bridgeport Corporation leased equipment to Metlock, Inc. on January 1, 2017. The lease agreement called for annual rental payments of $851 at the beginning of each year of the 4-year lease. The equipment has an economic useful life of 8 years, a fair value of $7,400, a book value of $5,400, and Bridgeport expects a residual value of $4,900 at the end of the lease term. Bridgeport set the lease payments with the intent of earning a 4% return, though Metlock is unaware of the rate implicit in the lease and has an incremental borrowing rate of 6%. 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.

What is the amount of the rental payments used in the lease agreement? (Round answer to 0 decimal places, e.g. 5,275.) Rental payments SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the entries for Bridgeport in 2017. Bridgeport uses straight-line depreciation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to o decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation 1/1/17 12/31/17 (To record the recognition of the revenue) 12/31/17 (To record depreciation expense on the leased equipment) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT How would Bridgeport's accounting in part (a) change if it incurred legal fees of $700 to execute the lease documents and $300 in advertising expenses for the year in connection with the lease? (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 Debit Credit Account Titles and Explanation 1/1/17 Over the course of the year 12/31/17 Click if you would like to Show Work for this question: Open Show Work