Frankie's Homemade Cheese Shop ("Frankie's") signed an advertising agreement with Simmons Boards ("Owner") for billboard advertising rights along Route 33 in the town of Hampton. Frankie's has the right to select and display advertising copy on billboard panels numbered 10 and 12 (panel numbers correspond to designated billboard locations) for a 3-year period from Jan. 1, 20X1, to Dec. 31, 20X3. In consideration for these rights, Frankie's agrees to pay $10,000 in year 1, $12,000 in year 2, and $13,000 in year 3. Assume that Frankie's is required to pay the annual fee on Jan. 1 of each contract year. Assuming Frankie's incremental borrowing rate is 5%, what are the entries Frankie should record at inception of the contract, then at the end of years 1, 2, and 3?

I see someone else is asking for help with the same question (above) and has not received an answer. I feel confident that it is an operating lease since it does not meet the criteria of a finance lease, but I am cannot find any information in the codification for the journal entries. I have read through the lease chapter of my intermediate accounting book as well and can't get the specifics. Since the payments are not the same each year, how do you get the present value of the lease for the right-of-use asset entry?