Hughey Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and straight-line depreciation method (no residual value).

Instructions (Round to the nearest dollar.)

(a) Prepare all of Hugheys journal entries for 2021 and 2022.