Wayne’s Clown College (C3), leases 10 mini clown cars from P3 on January 1, 2020. The pertinent data are:

• P3 purchased the clown cars in 2019 for $160,000 (the purchase was properly recorded as inventory)

• The lease is for an 8-year period. The economic life of the clown cars is 10 years and no residual value.

• Annual lease payments are $35,004 and will be paid to P3 each January 1, starting at the inception of the lease. The rate implicit in the lease is 6%. Record the Journal Entries for 2020.