Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $701,800 are made at the end of each year. The present value of the lease payments at 11% is $3,410,700. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).

Prepare an amortization table for 2018 and 2019.

Prepare all of Hughey's journal entries for 2018.