Prepare the journal entries for LeaseIT (Lessor) on January 1, 2019 AND the journal entries for Useit (Lessee) on December 31, 2019.

LeaseIT (lessor) Company entered into a Truck lease with Useit Company on January 1, 2019. The following information relates to this noncancelable lease: Estimated useful life .. ...... Nine years Lease term. . . . . . . . . . . . . Six years (title does not pass during lease and there is no purchase option). LeaseIT Company's implicit interest rate . ....... . 12% Lease Payments . .......... $7,000 per year, at beginning of each year starting on January 1, 2019 Useit Company's incremental borrowing rate . ....... . 14% Cost of asset to LeaseIT . . ....... $33,819 Fair Market Value of Asset . . .. . $34,767 Estimated residual value at end of lease term ..... $5,000 (None of which was guaranteed by the lessee) The present value of an annuity due of $1 for 6 years at 12% is 4.60478 and at 14% is 4.43308. The present value of $1 for 6 years at 12% is .50663 and at 14% is .45559. Both the implicit interest rate and incremental borrowing rate are known by all parties. Both parties use straight line for any depreciation. The lease is correctly classified as a sales type lease for the lessor and a finance lease for the lessee. Instruction: Prepare (i) the journal entries for LeaseIT (Lessor) on January 1, 2019 and (ii) the journal entries for Useit (Lessee) on December 31, 2019