To raise operating funds, Signal Aviation sold an airplane on January 1, 2018, to a finance company for $1,090,000. Signal immediately leased the plane back for a 10-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $1,120,000. Its cost and its book value were $760,000. Its useful life is estimated to be 12 years. The lease requires Signal to make payments of $155,820 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 9%.

Required: 1.&2. Prepare the appropriate entries for Signal on January 1, 2018 and December 31, 2018, to record the transaction and necessary adjustments. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1.Record the cash received on sale by Signal Aviation.

2.Record the beginning of the lease by Signal Aviation.

3.Record accrued interest.

4.Record the depreciation expense.