On January 1, 2020, Blossom Company contracts to lease equipment for 5 years, agreeing to make a payment of $153,962 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $642,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Blossoms incremental borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Blossom. Title to the equipment transfers to Blossom at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.

b. Prepare the journal entries that Blossom should record on January 1, 2020.

Date	Account Titles and Explanation	Debit	Credit
January 1, 2020	enter an account title To record the lease	enter a debit amount	enter a credit amount
	enter an account title To record the lease	enter a debit amount	enter a credit amount
	(To record the lease.)
	enter an account title To record lease payment	enter a debit amount	enter a credit amount
	enter an account title To record lease payment	enter a debit amount	enter a credit amount
	(To record lease payment.)