Marin Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $57,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Marins incremental borrowing rate is 8%. Marin is unaware of the rate being used by the lessor. At the end of the lease, Marin has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Marin uses the straight-line method of depreciation on similar owned equipment.

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020	Right of Use Asset	?
	Lease Liability		?
	Lease Liability	57000
	Cash		57000