Southwestern Edison Company leased equipment from Hi-Tech Le…

Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term 3 years Annual payments $40,000 on January 1 each year Life of asset 3 years Fair value of asset $111,332 Implicit interest rate 8% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2027. Assume a December 31 year-end. Note: Round your answers to the nearest whole dollar amounts.