United Cellular Systems leased a satellite transmission device from Pinnacle Leasing Services on January l, 2021. Pinnacle paid $625,483 for the transmission device. Its fair value is $625,483.

Terms of the Lease Agreement and Related Information are as below.

Lease term: 3 years (6 semiannual periods)

Semiannual lease payments: $ 120,000 at beginning of each period

Economic life of asset: 3 years

Interest rate: 12%

1. Prepare the appropriate entries for 2021 for both the lessee and the lessor.