On January 1, 2019, Amity Company leases a crane to Baltimore Company. The lease contains the following terms and provisions:

The lease is noncancelable and has a term of 10 years.

The lease does not contain a renewal or bargain purchase option.

The annual rentals are $4,050, payable at the beginning of each year.

Baltimore agrees to pay all executory costs directly to a third party.

The cost of the equipment to the lessor is $25,173.36. The fair value of the equipment is $26,700.

Amity incurs initial direct costs of $1,370.46.

The interest rate implicit in the lease is 12%.

Amity expects to collect all lease payments from Baltimore.

Amity estimates that the fair value at the end of the lease term will be $2,840 and that the economic life of the crane is 12 years. This value is not guaranteed by Baltimore.

Prepare the journal entries for Amity for 2019.

GENERAL JOURNAL Score: 137/163 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Jan. 1 Lease Receivable 1.00 Sales Revenue 1.00 Jan. 1 Cost of Goods Sold 1.00 Unguaranteed Residual Asset 1.00 2.00 Equipment Leased to Others Jan. 1 Initial Direct Sales-Type Lease Expense 1.00 Cash 1.00 Jan. 1 Cash 1.00 Lease Receivable 1.00 Dec. 31 Lease Receivable 1.00 Interest Income 1.00 12 Dec. 31 Unguaranteed Residual Asset 1.00 Interest Income 1.00