CALCULAT ATOR FULL SCREEN NTER BACK NEXT Novak 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 equipment's 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. Prepare Novak's journal entries on January 1, 2017, and December 31, 2017. Assume the annual lease payment is $39,000 at the beginning of each year, and Novak's incremental borrowing rate is S%, which is the same as the lessor's implicit rate. ( dit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to o decimal places, e.g. 5,265.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit 1/1/17 Right-of-Use Asset 111517 Lease Liability To record lease liablity) Liability 111517 39000 Cash 39000 (To record lease payment) 12/31/17 Lease Expense 39000 Lease Liability 1828 Right-of-Use Asset 37172