Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Larkspur Company. The following information relates to this agreement.

1.		The term of the noncancelable lease is 5 years with no renewal option. The equipment has an estimated economic life of 5 years.
2.		The fair value of the asset at January 1, 2017, is $77,300.
3.		The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $6,600, none of which is guaranteed.
4.		Larkspur Company assumes direct responsibility for all executory costs, which include the following annual amounts: (1) $880 to Rocky Mountain Insurance Company for insurance and (2) $1,450 to Laclede County for property taxes.
5.		The agreement requires equal annual rental payments of $17,555.01 to the lessor, beginning on January 1, 2017.
6.		The lessees incremental borrowing rate is 12%. The lessors implicit rate is 10% and is known to the lessee.
7.		Larkspur Company uses the straight-line depreciation method for all equipment.
8.		Larkspur uses reversing entries when appropriate.

Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessees annual accounting period ends on December 31.

Prepare an amortization schedule that would be suitable for the lessee for the lease term. LARKSPUR COMPANY (Lessee) Lease Amortization Schedule Annual Lease Reduction of Lease Liability Interest on Liability Lease Liability Date Payment 1/1/20 1/1/21 Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31 indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round answers to 2 decimal places, e.g. 15.25.) Account Titles and Explanation Debit Credit Date (To record the lease.) To record lease payment.) To record insurance payment.) (To record property tax payment.) (To record interest.) (To record deprecation.) To reverse interest.) To record lease payment.) To record insurance payment.) To record property tax payment.) To record interest.) To record depreciation.)