On January 1, 2004, the chief operating officer of New Innport signed a noncancelable lease for street equipment. The lease was for 10 years, the economic life of the property. The fair market value of the equipment (and present value of the minimum rentals) is $\$ 72,469$. The township's incremental borrowing rate is 8 percent and the rate implicit in the lease is 8 percent. The $\$ 10,000$ annual lease payment is due on the first day of the year.
Required: Prepare all journal entries necessary to record the lease for 2004 and the payment made in 2005.