Pina Corporation leases equipment from Falls Company on January 1, 2017. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment's 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. Prepare Pinas journal entries on January 1, 2017, and December 31, 2017. Assume the annual lease payment is $37,000 at the beginning of each year, and Kingston's incremental borrowing rate is 6%, which is the same as the lessor's implicit rate.