On January 1, 20A, Paddle Co. leased a machine from Boat, Inc. for a five year period. Equal annual payments under the lease are $300,000 and are due on December 31 of each year. The first payment was made on January 1, 20A, and the second payment was made on December 31, 20A. The five lease payments are discounted at 10% over the lease term. The present value of minimum lease payments at the inception of the lease and before the first annual payment was $1,251,000. Paddle appropriately accounts for the lease as a finance lease. Paddle depreciates similar assets using the double declining balance method. Required (this problem is included for practice computing PV aannuity due):

a) What entries are required to record the lease and the first payment on 1/1/20A? Please show your work on how you solved this so I can be able to do it

b) What entry is recorded when the 2nd payment is made on 12/31/20A (and interest is recognized)? Determine the present value of the lease liability after this payment?

c) Please provide the recorded entry for depreciation at year-end, 12/31/20A. Determine the book value of the asset after depreciation is recorded.