On January 1, 2020, Carla Vista Corporation sold a machine to Quick Finance for $136,000 and immediately leased it back. The machine was carried on Carla Vistas books at $110,500. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Carla Vista at lease-end. The lease requires three equal rental payments of $35,800 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 6%, the machine has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $58,000, none of which is guaranteed. Prepare Carla Vistas journal entries through the first payment date of January, 2021.

Date	Account Titles and Explanation	Debit	Credit
1/1/2012/31/201/1/21
	(To record sale)
1/1/2012/31/201/1/21
	(To record lease)
1/1/2012/31/201/1/21
1/1/2012/31/201/1/21