On January 1, 2014, P & P Products entered into an agreement to lease a piece of equipment from Beta Company, Inc. (the lessor). The lease term is five years and the interest rate is 8 percent. The first payment is made on January 1, 2014. The machine has a fair value of $600,000, a useful life of six years and no residual value. P & P Products does not know the interest rate that Beta uses. Assume that the entries have not yet been made on the books of P & P Products.

Required: Make the original lease entry(ies) on January 1, 2014.