Peters Company leased a machine from Johnson Corporation on January 1, 2018. The machine has a fair value of $17,000,000. The lease agreement calls for three equal payments at the end of each year. The useful life of the machine was expected to be three years with no residual value. The appropriate interest rate for this lease is 12%. Other information: PV of an ordinary annuity @12% for 3 periods: 2.40183 PV of an annuity due @12% for 3 periods: 2.69005

Required

: 1. Determine the amount of each lease payment.

2. 3. & 4. Prepare the appropriate journal entry.