Hire agreements

[Alex]

My company has got a hire agreement for a print machine. At the end of 
the hire agreement the machine has to be returned to the supplier so is 
of no value to us.

There are 20 equal quarterly payments to be made of £1,301.11, which to 
me suggests at the start of the agreement we have a liability of £26,022.20.

I think I would like to show the quarterly payment -

 1. reducing the liability;
 2. reducing the checking account;
 3. increasing the expense account;

Is this the correct way to account for these agreements?
If so how would I go about it.

Alex