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Knight Company purchased a machine on January 1, 2015, for$625,000 for the express purpose of leasing it. Themachine was expected to have a nine-year life from January 1, 2015,to have no salvage value, and to be depreciated on the straightline basis. On April 1, 2015, Knight leased the machineto McCracken Inc. for $150,000 a year for a four-year period endingMarch 31, 2019. The appropriate interest rate is 12%compounded annually. McCracken paid $150,000 to Knighton April 1, 2015. Knight retains title to the propertyand plans to lease it to someone else after the four-year leaseperiod. Both Knight and McCracken use a calendar yearbasis for financial reporting purposes.Record all entries for 2015 relating to the lease on the booksof Knight.Record all entries for 2015 relating to the lease on the booksof McCracken.