Operating Lease On January 1, XYZ Company entered into a lease for equipment rental. The company agreed to pay $4,500 per year for ten years. The present value of all ten lease payments is $27,651.

Assuming the company classified the lease as an operating lease, make the necessary journal entry(ies) to record the payment of the first year’s rent expense for the equipment. The first lease payment is made at the end of the year.