LeBron James $($LBJ$)$ Corporation agrees on January $1,2025,$ to lease equipment from Sheridan, Inc. for $3$ years.

The lease calls for annual lease payments of $$26,000$ at the beginning of each year. The lease does not transfer

ownership, nor does it contain a bargain purchase option, and is not a specialized asset. In addition, the useful life

of the equipment is $10$ years, and the present value of the lease payments is less than $90\%$ of the fair value of the

equipment.

Prepare LBJ$\text{'}$s journal entries on January $1,2025($commencement of the operating lease$),$ and on December $31,$

Assume the implicit rate used by the lessor is unknown, and LBJ$\text{'}$s incremental borrowing rate is $4\%.($Credit

account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required,

select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries. For

calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answers to $0$ decimal

places, e$.$g$.5,275.$ Record journal entries in the order presented in the problem.$)$