Laura Leasing Company sings an agreement on January 1, 2017 to lease equipment to Teal Mountain Company. The Following information realated to this agreement.

(a) The Term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years.

(b) The cost of the equipment is $55,000, and the fair value of the asset at January 1, 2017 is $74,000

(c)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 $3,000, non of which is guaranteed

(d) The agreement requires equal annual rental payments by the lesee to the lesor, beginning January 1, 2017

(e)The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lesee.

(f) Teal Mountain incurs initial direct costs of $600.00 and uses the straight-line depreciation method for all equipment.

Using the new GAPP guidelines to be implemented on Leases in 2018 please answer the following questions

1) Calculated the amount of the annual rental payment required by Laura Leasing (round to the nearest dollar)

2) Prepare the journal entries for the leasee in 2017 (round to the nearest dollar)

3) Prepare the journal entries for the lessor in 2017 (round to the nearest dollar)