On January 1, 2021, Hanson, Inc. leased several machines under a two-year operating lease agreement from Lee Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $50,000 each, payable semiannually on June 30 and December 31 each year. The machines were acquired by Lee Leasing at a cost of $410,000 and were expected to have a useful life of five years with no residual value. Appropriate adjusting entries are recorded at the end of each semi-annual period.

Required:

Prepare the appropriate journal entries for both (a) the lessee and (b) the lessor from the beginning of the lease through the end of 2021.