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 $4,150, 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 $25,836.57. The fair value of the equipment is $27,300.
	Amity incurs initial direct costs of $1,427.00.
	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 $3,110 and that the economic life of the crane is 12 years. This value is not guaranteed by Baltimore.

Required:

1.	Next Level What are initial direct costs? Discuss the accounting treatment of these costs. Are they treated in the same manner for (a) an operating lease, (b) a sales-type lease, and (c) a direct financing lease?
2.	From the lessors viewpoint, is the preceding lease a sales-type or direct financing lease? Give reasons to support your conclusion.
3.	Prepare the journal entries for Amity for 2019.

I am needing help with the journal entries, mainly the DB for the initial Lease Receivable account and how to arrive at the correct amount for the Cost of Goods Sold Entry? TIA!!