how should william report this lease? explain fully

A18-22 ASPE; Lessee and Lessor: On 10 December 20X0, Noel Inc. entered into a six-year equipment lease with Williams Ltd. The terms of the lease are as follows: The lease term will begin on 1 January 20X1. The fair value of the equipment at the inception of the lease is $120,000. The equipment's expected useful life is six or seven years. Noel Inc.'s incremental borrowing rate is 11%. Lease payments are $25,000 per year, payable at the end of each lease year. That is, the first payment will be due by 31 December 20X1. . Because of Noel Inc.'s shaky financial condition, Williams Ltd. determined the lease payments based on a 12% return, which is higher than Williams Ltd's normal return, Noel Inc. is aware of Williams Ltd.'s rate. . Both Noel and Williams apply ASPE accounting standards