Crane Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $ 30,688 at the beginning of each year. The first payment is received on January 1, 2020. Crane had purchased the machine during 2019 for $ 115,000. Collectibility of lease payments by Crane is probable. Crane set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Crane at the termination of the lease.

Prepare all necessary journal entries for Crane for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit 1/1/20 (To record the lease) (To record the first lease payment) 12/31/20