On 1 July, 2016, Falcon Ltd entered into a five-year lease agreement with Westpac Finance Ltd for an item of machinery. There are to be five annual lease payments of $50,000 per year paid at the end of each year (in arrears: ordinary annuity) on 30 June with the first payment on 30 June 2017.

The interest rate implicit in the lease is not readily determinable. Falcon Ltd's incremental borrowing rate is 5% per annum which reflects the fixed rate at which Flacon Ltd could borrow an amount similar to the value of the right-of-use asset, in the same currency, for a five-year term and with similar collateral.

In this problem, the lease payments are made at the end of each year. There is no up-front payment (on the commencement date) and the first lease payment would be paid on 30 June 2017. Calculate the periodic lease payment amount and provide the appropriate journal entry on 1 July 2016.