Please review the recent revision on the US lease accounting policy.

The revised lease accounting policy classifies all leases over 12 months into two types: operating vs. finance.

Python Company leased equipment from Hope Leasing on January 1, 2021. Hope recently purchased the equipment at a cost of $222,664.

Other information:

Lease term 3 years, finance lease

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 Python for 2021. Assume straight-line depreciation and a December 31 year-end. Round your answers to the nearest whole dollar amounts.