Monty Corporation leased equipment to Teal Mountain, Inc, on January 1, 2025. The lease agreement called for annual rental payments of $1,550 at the beginning of each year of the 3 -year lease. The equipment has an economic useful life of 7 years, a fair value of $11,300, a book value of $9,300, and Monty expects a residual value of $8,800 at the end of the lease term. Monty set the lease payments with the intent of earning a 8% return, though Teal Mountain is unaware of the rate implicit in the lease and has an incremental borrowing rate of 10%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Prepare all necessary journal entries for Teal Mountain in 2025. Teal Mountain uses straight-line depreciation. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. Round answers to 0 decimal places, es, 5,275. If no entry is required, select "No Entry" for the occount titles and enter O for the amounts. Record journal entries in the order presented in the problem.)