On January 1, 2018, NaviFast Leased Telecommunications Equipment from Rapid

On January 1, 2018, NaviFast leased telecommunications equipment from Rapid Voice, Inc. Rapid Voice's cash selling price for the equipment is $435,526. The lease agreement specifies six annual payments of $100,000 beginning December 31, 2018, and at each December 31 thereafter through 2023. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year and (b) 3 percent. The CPI at the beginning of the lease is 120. Rapid Voice routinely leases equipment to other firms. The interest rate in these lease arrangements is 10%.
Required: Prepare the appropriate journal entries for NaviFast to record the lease at its beginning. Round your answers to the nearest whole dollar amounts.

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