1. Deer Company purchased a machine on January 1, 2018, for $3,000,000 for the express purpose of leasing it. The machine was expected to have an eight-year life from January 1, 2018, to have no salvage value, and to be depreciated on a straight- line basis. Deer leases the machine to Stick Company at a total rental of $2,100,000, payable in five annual installments in the following declining pattern; 24% in the first two years, 20% in the third and fourth years and 12% in the last year. The lease payment begins January 1, 2018. In addition to the rent, Stick is required to pay annual executor cost of $27,000 to cover unusual repairs and insurance. The lease does not qualify as capital lease for reporting purposes. Deer incurred initial direct costs of $18,000 in obtaining the lease.

Required: Provide all necessary entries to record the lease transactions for 2018 and 2022 on the books of

1. Deer Company
2. Stick Company

1. Deer Companys Book.

Date	Account Title	Ref.	Debit	Credit
2018 Jan.1
Dec. 31

2022 Jan.1
2022 Dec. 31

b) Stick Companys Book.

Date	Account Title	Ref.	Debit	Credit
2018 Jan.1
2022 Jan.1