Headland Corporation ("Headland") manufactures equipment with an estimated economic life of 13 years. On May 30, 2020, Headland leases it to Gadget Corporation ("Gadget") for a period of 10 years. Assume both companies follow ASPE. Details of the lease are as follows: . . Equipment has a fair value and cost at the inception of the lease: $204,841. Guaranteed residual value: $22,000. Annual lease payment, due at beginning of each year: $31,250. Lease contains no renewal options and the equipment reverts to Headland at the end of the lease. Gadget's incremental interest rate, as well as implicit rate is 12%. Gadget uses straight-line amortization for similar equipment that it owns. Headland has determined that collectibility of lease payments is reasonably predictable and that no additional costs will be incurred. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare journal entries at May 30, 2021 for the lessee and lessor. Assume reversing entries are not used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round factor values to 5 decimal places, eg. 1.25124 and final answers to decimal places, e.g. 5,275. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Lessee: Debit Credit Date Account Titles and Explanation May 30, Equipment under Lease 2021 31250 Obligations under Lease 31250 Cash (To record lease payment.) Lessor: Debit Credit Date Account Titles and Explanation May 30, Cash 2021 31250 Interest Income 31250 (To record interest.) Lease Receivable Interest Income (To record collection of lease payment.)