Upon investigation of Relients records, you found that Relient had had two leases. One that is currently being accounted for as a capital lease and one being treated as an operating lease (under current standards).

The capital lease was for equipment. The lease started in 2018 and was a 5-year lease of annual lease payments of $50,000, starting on January 1, 2018. The lease also had a bargain purchase option for $20,000 at the end of the lease. The equipment had a useful life of 6 years and Relient uses the straight-line method of depreciation. The implicit interest rate for this lease was 6%.

The operating lease was a 15-year lease for their facilities that started on January 1, 2015. The lease consisted of annual rental payments, starting on January 1, 2016 of $60,000. When they started the lease in 2016, the expected useful life of the facility was 30 years. Relient imputed interest rate is 8%.

1. Assuming adoption of update 2016-02 in 2020, what journal entries will need to be made in 2020 for the transition to the new lease standard?