Kingston Corporation leases equipment from Falls Company on January 1, 2017. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment's 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. The annual lease payment is $35,000 at the beginning of each year, and Kingston's incremental borrowing rate is 6%, which is the same as the lessor's implicit rate. Prepare all the necessary journal entries for Falls Company (the lessor) for 2017, assuming the equipment is carried at a cost of $200,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit 12/31/17 To record the recognition of the revenue each period) 12/31/17 (To record depreciation expense on the leased equipment)