On January 1, 2016, Cersei leased medieval torture equipment from Ramsay

Company.

The lease agreement specifies annual payments of $100,000 each

beginning January 1, 2016, the beginning of the lease, and at each December

31 thereafter through 2020. The 4-year lease term ending December 31, 2019,

is equal to the estimated useful life of the equipment. Cerseis borrowing rate

for similar transactions is 10%.

For the LESSEE: Record the appropriate entries for the first year of the lease.