On January 1, 2020, Metlock Leasing Company inks an agreement to lease equipment to Cole Company. This agreement is covered by the information below.

1. The non-cancelable lease has a 6-year term with no renewal option. The equipment's economic life is anticipated to be 6 years.

The asset is worth $240,000 to the lessor. The asset's fair value on January 1, 2020 is $240,000.

3. At the conclusion of the lease period, the asset will revert to the lessor, at which point it is projected to have a residual value of $24,323, none of which is guaranteed.

Beginning on January1,2020, the agreement requires equal yearly rental payments.

5. Metlock's ability to collect lease payments is likely.

6. Assuming the lessor wants an 11 percent return on their investment,

Prepare all of the lessor's journal entries for 2020 and 2021 to record the lease agreement, lease payments, and revenue recognition. Assume the lessor's fiscal year ends on December 31 and it does not employ reversing entries.