The following facts pertain to a noncancelable lease agreement between Blossom Leasing Company and Blue Company, a lessee.

Inception date:May 1, 2017

Annual lease payment due at the beginning ofeach year, beginning with May 1, 2017$19,153.46

Bargain-purchase option price at end of lease term$4,300

Lease term5years

Economic life of leased equipment10years

Lessors cost$69,000

Fair value of asset at May 1, 2017$84,000

Lessors implicit rate9%

Lessees incremental borrowing rate9%

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs.

Prepare the journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2017 and 2018. Blues annual accounting period ends on December 31. Reversing entries are used by Blue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and Round answers to 2 decimal places, e.g. 15.25.)

Date