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Hornstein Finance Co. (lessor) leased an asset on Januar 2019, to HPQ Fishing (lessee). The lease agreement calls for eight annual lease payments of $60,000

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Hornstein Finance Co. (lessor) leased an asset on Januar 2019, to HPQ Fishing (lessee). The lease agreement calls for eight annual lease payments of $60,000 beginning on the commencement date. The interest rate implicit in the lease is 7%; however, HPQ cannot readily determine this. HPQ's incremental borrowing rate is 6%. The asset has an estimated value of $30,000 at the end of the lease; however, this is not guaranteed. HPQ must return the asset to the lessor at the en: of the lease. The leased equipment has an estimated useful life of 10 years and no residual value at that time. HPQ paid its lawyers $4,000 to review the lease agreement. HPQ uses the straight-line method to depreciate similar equipment that it owns and has a December 31 year end. Prepare HPQ Fishing's journal entries for January 1, 2019

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