The Bobo Company leased equipment from Bolinger Industries on January 1, 2018. Bolinger purchased the equipment at a cost of $270,000. Other information: Lease term 3 years Annual payments $120,000 beginning Jan. 1, 2018 Life of asset 3 years Implicit interest rate 8% Lessee's incremental rate 8% Present value of an ordinary annuity of $1, i = 8, n = 3 2.5771 Present value of an annuity due of $1, i = 8, n = 3 2.7833 Required: Round your answers to the nearest whole dollar amounts.

1. Calculate the amount of selling profit that Bolinger would recognize in this sales-type lease. Round to nearest dollar. Show calculations.

2. & 3. Prepare the appropriate journal entries for Bolinger on January 1, 2021 and December 31, 2021.