On January 1, 2016, Holbrook Company leased a building under a three-year operating lease. The annual rental payments are $64,000 on January 1, 2016, the inception of the lease, and $46,000 January 1 of 2017 and 2018. Holbrook made structural modifications to the building costing $88,800 before occupying the building. The useful life of the building and the modifications is 30 years with no expected residual value.

Required:

Prepare the appropriate journal entries for Holbrook Company for 2016. Holbrook's fiscal year is the calendar year, and the company uses straight-line depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)