Question: On January Year 1, Zelman entered a contract to lease equipment from ABC Inc. for two years and will make an annual lease payment $20,000 at the end of each year of the lease. Zelman's borrowing rate is 8%. The present value of the lease payment is $35,666 ($20,000/1.08 + $20,000/1.082) a) Prepare the journal entries for the lease liability at the beginning of Year 1 under (1) U.S. GAAP and (2) IFRS.