On January 2, 2020, Tree Ltd. signed a ten-year non-cancellable lease for a heavy-duty drill press. The lease required annual payments of $ 52,500, starting January 2, 2020 with title passing to Tree at the end of the lease. Tree is correctly accounting for this lease as a capital (finance) lease. The drill press has an estimated useful life of 20 years, with no residual value. Tree uses straight-line depreciation for all its plant assets. The lease payments were calculated based on an implicit interest rate of 8%.

Required:

What items and accounts will appear on the lessee income statement for the year ended December 31, 2020.