Shire Iron Works signed a lease on January 1 with Gator Bank for an iron-stamping machine. The equipment is not The iron-stamping machine has an economic life of 40 years and a fair value of $49,000. If Shire borrowed at Gator specialized in nature. The lease has a 10-year term with no purchase option or transfer of ownership. Under the terms of Bank, the loan would carry an interest rate of 7%. The lessee knows the implicit rate. The present value of the payments the contract, Shire must pay $4,400 on January 1 of each year. Gator Bank's implicit rate 5% due under the lease is $35,674, and the lease agreement is classified as an operating lease. Prepare the journal entries for the lessee at the commencement of the lease. Prepare the journal entry for the lessee at the lease commencement date. Exclude the first annual lease payment from this entry. We will record that payment in the next step. (Record debits first, then credits. Exclude explanations from any journal entries.) Account January 1 Prepare the entry for the first annual lease payment made on January 1. (Record debits first, then credits. Exclude explanations from any journal entries.) Account January 1