Problem 21A-12 D-g (Part Level Submission) Splish Industries and Blossom Inc. enter into an agreement that requires Blossom Inc. to build three diesel-electric engines to Splish's specifications. Upon completion of the engines, Splish has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2017, and requires annual rental payments of $385,173 each January 1, starting January 1, 2017 Splish's incremental borrowing rate is 8%. The implicit interest rate used by Blossom and known to Splish is 6%. The total cost of building the three engines is $2,600,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Splish depreciates similar equipment on a straight-line basis. At the end of the lease, Splish assumes title to the engines. Collectibility of the lease payments is probable. Click here to view the factor table. (b), (c) and (d) (b) Prepare the journal entry to record the transaction on January 1, 2017, on the books of Splish (the lessee). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit (c) Prepare the journal entry to record the transaction on January 1, 2017, on the books of Blossom (the lessor). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round answers to O decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit (d) Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Account Titles and Explanation Lessee (January 1, 2017) Lessor (January 1, 2017) Debit Credit