Entries for Lease-Lessor and Lessee

Doxey Company purchased a machine on January 1, 20Y1, for $2,200,000 for the express purpose of leasing it. The machine was expected to have a 9-year life from January 1, 20Y1, no salvage value, and to be depreciated on a straight-line basis. On March 1, 20Y1, Doxey leased the machine to Mondale Company for $600,000 a year for a 4-year period ending February 28, 20Y5. The appropriate interest rate is 12% compounded annually. Doxey paid a total of $20,000 for maintenance, insurance, and property taxes on the machine for the year ended December 31, 20Y1. Mondale paid $600,000 to Doxey on March 1, 20Y1. Doxey retains title to the property and plans to lease it to someone else after the 4-year lease period.

1. Give all the 20Y1 entries relating to the lease on Doxey Company's books. Assume their books are maintained on the calendar-year basis. Round your answers to the nearest dollar. For compound transactions, if an amount box does not require an entry, leave it blank.

2. Give all the 20Y1 entries relating to the lease on Mondale Company's books. Assume their books are maintained on the calendar-year basis. If an amount box does not require an entry, leave it blank.