Sheffield Corporation leases equipment from Falls Company on January $1,2025,$ The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers $3$ years of the equipments $8$ year useful life, and the present value of the lease payments is less than $90\%$ of the fair value of the asset leased. Prepare Sheffield's jounal entries on Juanuary $1,2025$ and December $31,2025.$ Assume the annual lease payment is $$40,000$ at the beginning of each year, and Sheffield's infremental borrowing rate is $5\%,$ which is the same as the lessor's implicit rate.