Crane Company leases a building to Larkspur, Inc. on January 1, 2017. The following facts pertain to the lease agreement.

1.		The lease term is 6 years, with equal annual rental payments of $4,314 at the beginning of each year.
2.		Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature.
3.		The building has a fair value of $25,000, a book value to Crane of $18,000, and a useful life of 7 years.
4.		At the end of the lease term, Crane and Larkspur expect there to be an unguaranteed residual value of $4,500.
5.		Crane wants to earn a return of 7% on the lease, and collectibility of the payments is probable. This rate is known by Larkspur.

Assume that Larkspur was unaware of the implicit rate used in the lease by Crane and has an incremental borrowing rate of 8%.

How would Crane initially measure the lease receivable, and how would Larkspur initially measure the lease liability and right-of-use asset? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to o decimal places, e.g. 5,275.) Crane Lease receivable 25001 Present value of lease pay 22002 Larkspur Lease Liability/Right-of-Use Asset 22002