Scape Corp. manufactures telephony equipment. Scape leased equipment to User. Inc on January 1, 2016. Scape produced the equipment at a cost of $5,000,000

- Lease description: 522,064 at beginning of each period

- Quarterly rental payment: 5 years (20 quarters)

- No residual value; no BPO

- Economic life of equipment: 5 years

- Implicit interest rate and lessees incremental borrowing rate: 12%

- Fair value asset: $8,000,000

Collectability of the rental payment is reasonably assured, and there are no lessor costs yet to be incurred.

Required: Prepare appropriate entries for Scape from the inception of the lease through the second rental payment on April 1, 2016