Pig Corporation leased equipment from Hillary Leasing on January 1, 2021. Hillary recently purchased the equipment at a cost of $222,664. Other information:

Lease term 3 years

Annual payments $80,000 on January 1 each year

Life of asset 3 years

Fair value of asset $222,664

Implicit interest rate 8%

Incremental rate 8%

There is no expected residual value.

Required:

Prepare appropriate journal entries for Pig Corporation for 2021. Assume straight-line depreciation and a December 31 year-end. Round to the nearest whole dollar.