The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing and Skysong Group, a lessee (amounts in thousands).

Commencement date		May 1, 2022
Annual lease payment due at the beginning of
each year, beginning with May 1, 2022		17,196.44
Bargain purchase option price at end of lease term		3,360
Lease term		5	years
Economic life of leased equipment		10	years
Lessors cost		54,600
Fair value of asset at May 1, 2022		76,440
Lessors implicit rate		8	%
Lessees incremental borrowing rate		8	%

The collectibility of the lease payments by Sheridan is probable.

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 2022 and 2023. Skysongs annual accounting period ends on December 31. Reversing entries are used by Skysong. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.)