Federated Fabrications leased a tooling machine on January $1,2024,$ for a three$-$year period ending December $31,2026.$

The lease agreement specified annual payments of $$30,000$ beginning with the first payment at the beginning of the lease, and each December $31$ through $2025.$

The company had the option to purchase the machine on December $30,2026,$ for $$39,000$ when its fair value was expected to be $$54,000,$ a sufficient difference that exercise seems reasonably certain.

The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor$$s implicit rate of return was $11\%.$

Required:

Record the entry to reflect the change from a leased asset to ownership of that asset.