Answer:
PART-1)
Fair value of leased asset to lessor  = 25,000
Minus: PV of un-guaranteed residual value $8,250 X 0.82270  = 6,787
Amount to be recovered through lease payments  = 18,213
Four periodic lease payments ($18,213 /3.72325)  = 4,892
PART-2)
<u>01/01/2017
</u>
Debit: Cash  = 4,892
Credit: Unearned Lease Revenue  = 4,892
<u>12/31/2017</u>
Debit: Unearned Lease Revenue  = 4,892
  Credit: Lease Revenue  = 4,892
<u>12/31/2017</u>
Debit: Depreciation Expense  = 3,333
  Credit: Accumulated Depreciation – Equipment  = 3,333