A lease involves payments of $12,000 per year for five years. The payments are made at the end of each year. The lease involves a bargain purchase option of $5,000 to be exercised at the end of the 5-year period. The total economic life of the leased asset is eight years. The interest rate implicit in the lease is 11% compounded annually. Make the journal entries necessary on the books of the lessee company

(1) On the lease-signing date and

(2) At the end of the first year, including the recording of the first lease payment.