Lessor Co. enters into an operating lease of property with Lessee Co. on January 1, 2020, for a five-year term at an annual fixed payment of $30,000 (beginning of period payments). Prepare the journal entries in 2020 for the lessee assuming that the lessee is aware of the rate implicit in the lease of 5%.

a. January 1, 2020Record the right-of-use asset.

b. January 1, 2020Record the lease payment.

c. December 31, 2020Record the adjusting entry.