On January 1, 2017, Cullumber Company leased equipment to Flynn Corporation. The following information pertains to this lease: The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $2,000, while the expected residual value the end of the lease is $6,000 2. Equal rental payments are due on January 1 of each year, beginning in 2017. 3. The fair value of the equipment on January 1, 2017, is $170,000, and its cost is $140,000. 4. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis. 5. Cullumber set the annual rental to ensure a 5% rate of return. Flynn's incremental borrowing rate is 6%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments by the lessor is probable, Both the lessor and the lessee's accounting periods end on December 31. Prepare all the necessary journal entries for Flynn for 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent Round answers to o decimal places, e.g. 5,275.) Date Account Titles and Explanation 1/1/17 Lease Receivable Cost of Goods Sold (To record the lease) Sales Revenue Inventory (To record the receipt of lease payment) 12/31/17 Cash Lease Receivable (To record amortization of the right-of-use asset) Interest Expense Interest Revenue