26. Python Company leased equipment from Hope Leasing on January 1, 2013. Hope purchased the equipment at a cost of $222,664. Other information:

lease term : 3years

Annual payments 80,000 on jan 1 each year

life of asset 3 years

fair value of asset 222,664

implicit interest rate 8%

incremental rate 8%

There is no expected residual value. Required: Prepare appropriate journal entries for Python for 2013. Assume straight-line depreciation and a December 31 year-end.