Packard Limited is planning on leasing 150 desktop computers from Hewlett Corporation. The list price for the computers is \(\$ 2,000\) each, or \(\$ 300,000\) in total. The lease will be for three years, starting on 1 October \(20 \mathrm{X} 4\). The lease payments are \(\$ 26,000\) at the beginning of each quarter. Packard's incremental borrowing rate is \(8 \%\) per annum. Packard's fiscal year ends on 31 December. The computers have an expected useful life of four years but will almost certainly have no market value at the end of the lease. Although it is not specified in the lease agreement, Packard's customary practice with such leases is to simply convey title to the computers at the end of the lease term, at a nominal payment by the lessee.

Required:

1. Prepare the journal entries to record the lease and lease payments for Packard's fiscal year ending 31 December \(20 X 4\).

2. What amounts relating to the lease liability will appear on Packard's 31 December 20X4 statement of financial position?