Shamrock Leasing Company agrees to lease equipment to Bridgeport Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $541,000, and the fair value of the asset on January 1, 2020, is $760,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $45,000. Bridgeport estimates that the expected residual value at the end of the lease term will be 45,000. Bridgeport amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Shamrock desires a 10% rate of return on its investments. Bridgeports incremental borrowing rate is 11%, and the lessors implicit rate is unknown. Prepare the journal entries Bridgeport would make in 2020 and 2021 related to the lease arrangement.