Refer to Practice 15-12. Assume that the lease is accounted for as a direct financing lease instead

Question:

Refer to Practice 15-12. Assume that the lease is accounted for as a direct financing lease instead of as an operating lease. The interest rate implicit in the lease is 15%. Make the journal entries necessary on the lessor’s books to record
(1) The signing of the lease,
(2) The receipt of the initial $2,600 lease payment on the lease signing date, and
(3) The recognition of interest revenue at the end of the first year.