Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the equipment at a cost of $1,450,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually.

Related Information:
Lease term	1 year (4 quarterly periods)
Quarterly lease payments	$58,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30.
Economic life of asset	5 years
Interest rate charged by the lessor	9%