Roland Corporation entered into the following transactions:

1. On January 1, 2014 Pear Car Rental leased a car to Roland Corporation for one year. Terms of the operating lease call for monthly payments of $650.

2. On January 1, 2014, Roland Corporation entered into an agreement to lease 20 machines from Pear Corporation. The terms of the lease agreement require an initial payment of $500,000 and then three annual rental payments of $600,000 beginning on December 31, 2014. The present value of the three rental payments is $1,492,108. The lease is a capital lease.

Instructions

Prepare the appropriate journal entries to be made by Roland Corporation in January related to the lease transactions