Prepare the January 1 journal entry to record the first $17,400 cash lease payment.

On January 1, Rogers (lessee) signs a three-year lease for machinery that is accounted for as a finance lease. The lease requires three $17,400 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Year 2). The present value of the three annual lease payments is $49,400, using a 5.780% interest rate. The lease payment schedule follows. Payments (A) Beginning Balance of Lease Liability $ 49,400 32,000 16,450 Date Jan. 1, Year 1 Dec. 31, Year 1 Dec. 31, Year 2 (B) Debit Interest on Lease Liability 6.003% X (A) $ 0 1,850 951 $ 2,800 (C) Debit Lease Liability (D) - (B) $ 17,400 15,550 16,450 $ 49,400 (E) Ending Balance of Lease Liability (A) - (C) $32,000 16,450 (D) Credit Cash Lease Payment $ 17,400 17,400 17,400 $ 52,200