At the beginning of $2024,$ VHF Industries acquired a machine with a fair value of $$6,074,700$ by signing a four$-$year lease. The lease is payable in four annual payments of $$2$ million at the end of each year.

Note: Use tables, Excel, or a financial calculator.$($FV of $$1,$PV of $$1,$FVA of $$1,$PVA of $$1,$FVAD of $$1$and$$PVAD of $$1)$

Required:

$1.$What is the effective rate of interest implicit in the agreement?

$2-4.$Prepare the lessee$$s journal entries at the beginning of the lease, the first lease payment at December $31,2024$ and the second lease payment at December $31,2025.$

$5.$Suppose the fair value of the machine and the lessor$$s implicit rate were unknown at the time of the lease, but that the lessee$$s incremental borrowing rate of interest for notes of similar risk was $11\%.$ Prepare the lessee$$s entry at the beginning of the lease.