The Police Department of Ramser Falls signed a noncancellable lease for computer equipment on January 1, 2012. The lease was for 5 years, the economic life of the property. The fair market value of the equipment (and present value of the minimum rentals) is $ 21,198, and the city’s incremental borrowing rate is 9 percent. The annual lease payments are $ 5,000 and are due on the first day of the year, beginning on January 1, 2012. Assuming the equipment is delivered when the lease is signed, prepare all journal entries necessary to record the lease transaction for 2012 and the payment made in 2013.