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Crane. Inc. has entered an agreement to lease an oid warehouse with a useful life of $5$ years and a fair value of $$32,000$ from Cullumber Corporation. The agreement stipulates the following.

Rental payments of $$7,421$ are to be made at the start of each year of the $5-$year lease. No residual value is expected at the end of the lease

Crane must reimburse Cullumber each year for any real estate taxes incurred for the year. Last year, the cost of real estate taxes was $$800,$ though these costs vary from year to year.

Crane must make a payment of $$500$ with the rental payment each period to cover the insurance Cullumber has on the warehouse.

Crane paid legal fees of $$3,000$ in executing the lease.

Assuming Crane's incremental borrowing rate is $8\%$ and the rate implicit in the lease is unknown, prepare the journal entry to record the initial lease liability and right$-$of$-$use asset for Crane. $($List all debit entries before credit entries. Credit account titles are automatically indented when the 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. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answers to $0$ decimal places, e$8.5,275.)$

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Account Titles and Explanation

Debit

Credit

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