Peters Company leased a machine from Johnson Corporation on January $1,2024.$ The machine has a fair value of $$13,000,000.$ The lease agreement calls for five equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. The appropriate interest rate for this lease is $10\%.$

Other information:

PV of an ordinary annuity at $10\%$ for $5$ periods: $379079$

PV of an annuity due at $10\%$ for $5$ periods: $416987$

Required:

Determine the amount of each lease payment.

Prepare the journal entry for Peters Company at the beginning of the lease.

Prepare the journal entry for the first lease payment $($ignore amortization$).$

Prepare the journal entry for the second lease payment $($ignore amortization$).$

Complete this question by entering your answers in the tabs below.

Required $2$ to

$4$

$2.$ Prepare the journal entry for Peters Company at the beginning of the lease.

$3.$ Prepare the journal entry for the first lease payment $($ignore amortization$).$

$4.$ Prepare the journal entry for the second lease payment $($ignore amortization$).$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the host account field. Round your intermediate and final answers to the nearest whole dollar.

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Journal entry worksheet

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$3$

Record the entry for the first lease payment.