Bramble Corporation leased equipment to Marin, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,122 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $7,700, a book value of $5,700, and Bramble expects a residual value of $5,200 at the end of the lease term. Bramble set the lease payments with the intent of earning a 5% return, though Marin is unaware of the rate implicit in the lease and has an incremental borrowing rate of 7%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature.

Prepare all necessary journal entries for Marin in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)