The Bulldog Company leased an asset from the Carmel Company. The asset cost the Carmel Company $462,000. The terms of the lease are as follows:

1. The present value of the lease payments is $600,000.
2. The lease is signed on January 1, 2020.
3. The lease term is 7 years.
4. The first payment is due on January 1, 2020
5. The asset life is 7 years.
6. There is no residual value
7. The implicit interest rate of the lease is 7%.
8. There are no material uncertainties.

Required:

1. Calculate the annual lease payments.
2. Provide the journal entries for both the lessee and lessor for 2020 and 2021.