On January 1, 2021, Park Industrial leased equipment from Rochester Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Rochester. The equipment cost Rochester $400,000 and has an expected economic life of five years, Rochester expects the residual value at December 31, 2024, will be $50,000. Negotiations led to the lessee guaranteeing a $70,000 residual value. Equal payments under the lease are $100,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Park is aware that Rochester used a 5% interest rate when calculating lease payments. Present value of $50,000 with n = 4, i = 5% is equal to $41,135 Present value of $70,000 with n = 4, i = 5% is equal to $57,589 Present value of $20,000 with n = 4, i = 5% is equal to $16,454 Present value of an ordinary annuity of $100,000 with n = 4, i = 5% is equal to $354,595 Required: Round your answers to the nearest whole dollar amounts. 1. Prepare the appropriate journal entries for both Park and Rochester on January 1, 2021, to record the lease. 2. Prepare all appropriate journal entries for both Park and Rochester on December 31, 2021, related to the lease