Elf Leasing purchased a machine for $600,000 and leased it to IGA, Incorporated on January 1, 2024.

Lease description:
Quarterly rental payments	$31,101 at beginning of each period
Lease term	6 years (24 quarters)
No residual value; no BPO
Economic life of machine	6 years
Implicit interest rate and lessees incremental borrowing rate	8%
Fair value of asset	$600,000

Required:

Prepare appropriate entries for both IGA and Elf Leasing from the beginning of the lease through the second rental payment on April 1, 2024. Amortization is recorded at the end of each fiscal year (December 31).

For the lessee

1) Record the entry at the inception of the lease for IGA (Lessee).

2)Record the first payment for IGA.

3) Record the second payment for IGA.

For the lessor

1) Record the entry at the inception of the lease for Elf Leasing.

2) Record the first payment for Elf Leasing.

3)Record the second payment for Elf Leasing.