Flint Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Buffalo Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:

1. Buffalo Company has the option to purchase the equipment for $17,300 upon termination of the lease.

2. The equipment has a cost and fair value of $170,000 to Flint Leasing Company. The useful economic life is 2 years, with a salvage value of $17,300.

3. Buffalo Company is required to pay $4,800 each year to the lessor for executory costs.

4. Flint Leasing Company desires to earn a return of 10% on its investment.

5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.

(a) Prepare the journal entries on the books of Flint Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018.

1/1/17	lease receivable	170,000
	equiptment		170,000
12/31/17	cash	?
	executory costs payable		4800
	lease receivable		?
	interest revenue		17000
12/31/18	cash	?
	executory costs payable		4800
	lease receivable		?
	interest revenue		?