Nash Leasing Company agrees to lease equipment to Crane Corporation on January 1, 2017. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $489,000, and the fair value of the asset on January 1, 2017, is $699,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $94,000. Crane estimates that the expected residual value at the end of the lease term will be 94,000. Crane amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2017. 5. The collectibility of the lease payments is probable. 6. Nash desires a 9% rate of return on its investments. Cranes incremental borrowing rate is 10%, and the lessors implicit rate is unknown.

(Assume the accounting period ends on December 31.) 1.Calculate the amount of the annual rental payment required.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) 2.Compute the value of the lease liability to the lessee.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) 3.Prepare the journal entries Crane would make in 2017 and 2018 related to the lease arrangement.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,972.) 4.Prepare the journal entries Nash would make in 2017 and 2018 related to the lease arrangement.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for