Python Company Leased Equipment from Hope Leasing on January 1

Essay

Python Company leased equipment from Hope Leasing on January 1, 2018. Hope recently purchased the equipment at a cost of $222,664.
Other information:
$$\begin{array} { l l } \text { Lease term } & 3 \text { years } \\\text { Annual payments } & \$ 80,000 \text { on January } 1 \text { each year } \\\text { Life of asset } & 3 \text { years } \\\text { Fair value of asset } & \$ 222,664 \\\text { Implicit interest rate } & 8 \% \\\text { Incremental rate } & 8 \%\end{array}$$
There is no expected residual value.
Required: Prepare appropriate journal entries for Python for 2018. Assume straight-line depreciation and a December 31 year-end. Round your answers to the nearest whole dollar amounts.