Prepare the journal entries that Crane should make in 2025.

On January 1, 2025, Larkspur Co. leased a building to Crane Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 vears. The building is expected to have a residual value at the end of the lease of $3,700,000 (unguaranteed). 2. The leased building has a cost of $4,200,000 and was purchased for cash on January 1,2025. 3. The bulding is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $275,000 per year and are made at the beginning of the year, 5. Crane has an incremental borrowing rate of 5%, and the rate implicit in the lease is unknown to Crane. 6. Both the lessor and the lessee are on a calendar-year basis. Click here to view factor tables