Sage Hill Corporation manufactures drones. On December 31, 2016, it leased to Althaus Company a drone that had cost $99,400 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires 5 equal annual rentals of $44,500 payable each December 31, beginning December 31, 2016. An interest rate of 9% is implicit in the lease agreement. Collectibility of the rentals is probable. Prepare Sage Hills December 31, 2016, journal entries.