Southwestern Edison Company Leased Equipment from Hi-Tech Leasing on January

Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2009. Hi-Tech manufactured the equipment at a cost of $90,000.
There is no expected residual value.
Required:
Prepare appropriate journal entries for Hi-Tech Leasing for 2009. Assume a December 31 year-end.
$$\begin{array}{l}\text { Other information: }\\\begin{array} { l l } \text { Lease term } & 3 \text { years } \\\text { Annual payments } & \$ 40,000 \text { on January } 1 \text { each year } \\\text { Life of asset } & 3 \text { years } \\\text { Fair value of asset } & \$ 111,332 \\\text { Implicit interest rate } & 8 \% \\\text { Incremental rate } & 8 \%\end{array}\end{array}$$