On January 1, 2018 Lessor Industries leased equipment to Lessee Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Lessor Industries. The equipment cost Lessor Industries $369,175 and has an expected useful life of six years. its normal sales price is $369,175. The implicit rate (known by the lessee) is 10%. The lessee's incremental borrowing rate is 12%. The lessee-guaranteed residual value at December 31, 2021, is $30,000. The expectation is that the asset will have a residual value of $30,000 at that time. Equal payments under the lease are $100,000 and are due on January 1 of each year. The first payment was made on January 1, 2018. Collectability of the remaining lease payments is reasonably assured, and Lessor has no material cost uncertainties. Both companies use straight-line depreciation. The lease qualifies as a capital financing lease for both the lessee and the lessor Requirements 1. Prepare journal entries for the Lessee Company on January 1, 2108 AND December 31, 2018. 2. Prepare journal entries for the Lessor Company on January 1, 2018 AND December 31, 2018. 3. In good form, prepare the 2018 partial income statement for Lessee Company 4. In good form, prepare the 2018 partial balance sheet for Lessee Company 5. In good form prepare the 2018 partial income statement for Lessor Company 6. In good form prepare the 2018 partial balance sheet for Lessor Company