On January 2, 2001, the Wilcox Studios leased six computersfor use in the engineering department. The lease period is for 13years and the estimated economic life of the leased property is 15years. The lease doesn't contain automatic title transfer or abargain purchase option. Lease payments are $9,000 per year,payable each December 31. The incremental borrowing rate for Wilcoxis 12% and the implicit rate (known by Wilcox) is 10%.The company uses straight-line depreciation for this type of equipment.
Provide the necessary journal entries to record thetransactions for Wilcox for period January 2, 2001 through December31, 2002.