Scape Corp. manufactures telephony equipment. Scape leased equipment to User, Inc. on January 1, 2018. Scape produced the equipment at a cost of $4,400,000.

Lease description:
Quarterly rental payments	$424,224 at beginning of each period
Lease term	6 years (24 quarters)
No residual value; no BPO
Economic life of equipment	6 years
Implicit interest rate and lessees incremental borrowing rate	12%
Fair value of asset	$7,400,000

Required: Prepare appropriate entries for both User and Scape from the beginning of the lease through the second rental payment on April 1, 2018. Depreciation and amortization are recorded at the end of each fiscal year (December 31). Do this for both user lessee and Scape lessor.

For User Lessee:

1. Record the lease.

2. Record the cash payment.

3. Record the cash payment.

For Scape Lessor:

1. Record the lease.

2. Record the cash received.

3.Record the cash received.