Diablo Company leased a machine from Juniper Corporation on January 1, 2016. The machine has a fair value of $26,000,000. The lease agreement calls for four equal payments at the end of each year in the amount of $8,560,095. The useful life of the machine was expected to be four years with no residual value. The appropriate interest rate for this lease is 12%.
Required:
Prepare the appropriate journal entries.