II. Lease Problem #1 (21 points) noncancelable On January 1, 2015, the Acme Finance Company (as lessor) entered into a 10 year lease agreement with the Lyon Company for machinery which had a market value of S4,000,000. Minimum lease payments under the lease agreement which expires on December 31,2024, total $5,920,000. The present value of the minimum lease payments is $4,000,000. Payments of $592,000 are due each January 1. The first payment was made on January 1, 2015, when the lease agreement was finalized, and the second lease payment will be made on December 31, 2015, and each December 31st thereafter. The interest rate of 10% which was stipulated in the lease agreement is the implicit rate set by the lessor. Lyon expects the machine to have a ten- year life with no salvage value, and records depreciation on a straight-line basis. Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be by the lessor. Required: (a) What journal entries should be recorded by the Acme Finance Company (lessor) related to this lease for the years 2015 and 2016? Round to the nearest dollar