On January 1, 2019, PT TEH sold a machine to PT GEL Finance for $850,000 and immediately leased back the machine. The related information on the agreement is available below. 1. PT TEH recorded the machine on its book for $750,000. 2. The term of the lease is 3 years and non-cancelable; title will not transfer to PT TEH, and the expected (unguaranteed) residual value at the end of the lease is $562,500. 3. At the beginning for each year, PT TEH is required to make equal rental payments of $138,817.50 based on the lease agreement. 4. The incremental borrowing rate for PT TEH is 7%. PT TEH is aware that PT GEL Finance requires the annual payments to ensure a rate of return of 7%. 5. The fair value of the machine is $850,000 on January 1, 2019, and the machine has an estimated economic life of 10 years. Note. Present value factor of an annuity due for 3 periods at 7% is 2.80802 Instructions Prepared the journal entries for both the lessee and the lessor for 2019 to reflect the sale and leaseback agreement