Pearl Steel Company, as lessee, signed a lease agreement for equipment for $5$ years, beginning December $31,2025.$ Annual rental payments of $$51,000$ are to be made at the beginning of each lease year $($December $31).$ The interest rate used by the lessor in setting the payment schedule is $4\%$; Pearl's incremental borrowing rate is $6\%.$ Pearl is unaware of the rate being used by the lessor. At the end of the lease, Pearl has the option to buy the equipment for $$5,000,$ considerably below its estimated fair value at that time. The equipment has an estimated useful life of $7$ years, with no salvage value. Pearl uses the straight$-$line method of depreciation on similar owned equipment.

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Prepare the journal entries, that Pearl should record on December $31,2025.($Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answers to $0$ decimal places, e$.$g$.58,971.$ List all debit entries before creat entries.$)$

$\backslash$table$[[,$Account Titles and Explanation,Debit,$],[$December$,,,],[31,2025,,,]]$

$($To record leased asset and related liability.$)$