On January $1,$ Rogers $($lessee$)$ signs a three$-$year lease for machinery that is accounted for as a operating lease. The lease requires three $$14,837$ lease payments $($the first at the beginning of the lease and the remaining two at December $31$ of Year $1$ and Year $2).$ The present value of the three annual lease payments is $$42,200,$ using a $5\mathrm{.}580\%$ interest rate. The lease payment schedule follows.

Date $($A$)$                     Beginning Balance of Lease Liability $($B$\mathrm{) \; \; \; \; \; \; }$ Debit Interest on Lease Liability $5\mathrm{.}580\%\backslash$times $($A$)+($C$)$ Debit Lease Liability $($D$)($B$)=($D$)$ Credit Cash Lease Payment $($E$)$ Ending Balance of Lease Liability $($A$)($C$)$

 

 January $1,\; \; \; \; \; \; \; \; \; \;$ Year $1$                                                                          $ $42,20\mathrm{0\; \; \; \; \; \; \; \; \; \; \; \; }$ $ $0$                $ $14,837$                              $ $14,837$                   $ $27,363$ 

 

 December $31,$             Year $127,3631,52713,31014,83714,053$ 

 

 December $31,\; \; \; \; \; \; \; \;$Year $214,05378414,05314,8370$ 

 

$ $2,311$ $ $42,200$ $ $44,511$

Required:

Prepare the January $1$ journal entry at the start of the lease to record any asset or liability.

Prepare the January $1$ journal entry to record the first $$14,837$ cash lease payment.

Prepare the December $31$ journal entry to record amortization at the end of $($a$)$ Year $1,($b$)$ Year $2,$ and $($c$)$ Year $3.$

Prepare the December $31$ journal entry to record the $$14,837$ cash lease payment at the end of $($a$)$ Year $1$ and $($b$)$ Year $2.$