Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2016.

Other information:
Lease term	4 years
Annual payments	$87,000 on January 1 each year
Life of asset	4 years
Implicit interest rate	8%
Incremental rate	8%
PV, annuity due, 4 periods, 8%	3.5771
PV, ordinary annuity, 4 periods, 8%	3.3121
Hi-Tech's cost of the equipment	$311,208

There is no expected residual value.

Required:

Prepare appropriate journal entries for Hi-Tech Leasing for 2016 and 2017. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the lease.Record the cash receipt for the annual payments.Record the entry for the interest revenue.Record the cash receipt for the annual payments.

Record the lease.

Record the cash receipt for the annual payments.

Record the entry for the interest revenue.

Record the cash receipt for the annual payments.

Record the entry for the interest revenue.