Crazy Charlie’s Inc. leased party tents to Dina’s Deli to be used for outside seating at Dina’s 15 locations. The lease term is for 2 years. The economic life of the tents is 10 years. The interest rate of 10% was explicit in the lease contract. The cost of the tents to Crazy Charlie is $350,000 and fair value of the 15 tents is also $350,000. The lease payments of $8,000 per tent will be made annually starting on the first day of the lease, May 1, 2026. Assume this lease is being accounted for as an operating lease (a non-capital lease). What would both Crazy Charlie and Dina’s Deli record on

1. May 1, 2026
2. December 31, 2026
3. May 1, 2027