Rexon Company leases equipment to Ten-Care Company beginning January 1, 2016. The lease terms, provisions, and related events are as follows:

1. The lease term is 8 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year.

2. The cost, and also fair value, of the equipment is $500,000. The equipment has an estimated life of 8 years and has a zero estimated value at the end of that time.

3. Ten-Care agrees to pay all executory costs.

4. The lease contains no renewal or bargain purchase option.

5. The interest rate implicit in the lease is 14%.

6. The initial direct costs are insignificant and assumed to be zero.

7. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor.

Required:

1. Prepare a table summarizing the lease receipts and interest revenue earned by Rexon.

2. Prepare journal entries for Rexon for the years 2016 and 2017.

***FOR THE FIRST JOURNAL ENTRY 862,280 IS NOT THE CORRECT AMOUNT. NOR IS 500,000 OR 362,280***