Doxey Company purchased a machine on January 1, 2015, for $1,050,000 for the express purpose of leasing it. The machine was expected to have a nine-year life from January 1, 2015, to have no salvage value, and to be depreciated on a straight-line basis. On January 1, 2015, Doxey leased the machine to Mondale Company for $300,000 a year for a four-year period ending January 1, 2019. The appropriate interest rate is 12% compounded annually. Doxey paid a total of $15,000 for maintenance, insurance, and property taxes on the machine for the year ended December 31, 2015. Mondale paid $300,000 to Doxey on January 1, 2015. Doxey retains title to the property and plans to lease it to someone else after the fouryear lease period. Requirements:

(i) Discuss the nature of this lease transaction from the viewpoint of the lessee. (ii) Prepare the journal entry or entries to record the transaction on January 1, 2015, on the books of Mondale Company. (iii) Prepare the journal entries for the lessee to record the first rental payment on January 1, 2015. (iv) Prepare the journal entries for the lessee to record interest expense at December 31, 2015 (Prepare a lease amortization schedule for 2 years). (v) Prepare necessary entries to charge depreciation in the books of the lessee.