January 1, 2021, Caf Med leased some restaurant equipment from Crescent Corporation under a 9-year lease agreement. The lease agreement states that the annual payments of $25,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 through 2028. The equipment was acquired recently by Crescent at a cost of $180,000 (fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $50,995.) Crescent seeks a 10% return on the lease investments. Because of this arrangement, the lease is deemed to be a finance lease. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. What will be the effect of the lease on Caf Med's earnings for the first year? (ignore the taxes) (Enter decreases with negative sign.) 2. What will be the balances for the balance sheet accounts related to the lease at the end of the first year for Caf Med? (ignore taxes) I (For all requirements, round your intermediate calculations and final answers to the nearest whole dollars.)