On January $1,2020,$ a machine was purchased for $$1,020,000$ by Windsor Co$.$ The machine is expected to have an $8-$year life with no salvage value. It is to be depreciated on a straight$-$line basis. The machine was leased to Wildhorse Inc. for $3$ years on January $1,2020,$ with annual rent payments of $$300,000$ due at the beginning of each year, starting January $1,2020.$ The machine is expected to have a residual value at the end of the lease term of $$562,500,$ though this amount is unguaranteed.

Record the journal entries Wildhorse would record for $2020$ on this lease, assuming its incremental borrowing rate is $7\%$ and the

rate implicit in the lease is unknown. $($Credit account titles are automatically indented when the amount is entered. Do not indent

manually. Round answers to $0$ decimal places, e$.$g$.5,275.$ Record journal entries in the order presented in the problem.$)$

Date

Account Titles and Explanation

Debit

Credit

$($To record the lease$)$

$($To record lease payment$)$