Assume that IBM leased equipment that was carried at a cost of $195,000 to Cullumber Company. The term of the lease is 7 years December 31, 2016, with equal rental payments of $39,018 beginning December 31, 2016. The fair value of the equipment at commencement of the lease is $225,000. The equipment has a useful life of 7 years with no salvage value. The lease has an implicit interest rate of 7%, no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable. Prepare IBMs December 31, 2016, journal entries at commencement of the lease.