Refer to the data in PE 10-11. Make the necessary journal entry (or entries) to record the first lease payment on December 31, 2012. Round amounts to the nearest penny.

Data from PE 10-11

Gray Company leased a delivery truck on January 1, 2012. Th e lease requires annual payments of $7,500 for seven years at a 12% rate of interest payable at the end of each year. Th e company classifies this lease as a capital lease. Make the necessary journal entry (or entries) to record the lease of this asset.