On December 31, 2016, Metlock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Metlock to make annual payments of $8,482 at the beginning of each year, starting December 31, 2016. The machine has an estimated useful life of 6 years and a $5,000 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Metlock uses the straight-line method of depreciation for all of its plant assets. Metlocks incremental borrowing rate is 8%, and the lessors implicit rate is unknown. Prepare all necessary journal entries for Metlock for this lease through December 31, 2017.