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Blossom Corporation (\"Blossom\") manufactures equipment with an estimated economic life of 14 years. On May 30, 2023, Blossom leases it to Gadget Corporation (\"Gadget\") for a period of 10 years. Details of the lease are as follows: . Equipment has a fair value and cost at the inception of the lease: $266,147. Guaranteed residual value: $27,000. . Annual lease payment, due at beginning of each year: $35,000. Lease contains no renewal options and the equipment reverts to Blossom at the end of the lease. . Gadget's incremental interest rate, as well as implicit rate is 8%. Gadget uses straight-line depreciation for similar equipment that it owns. . Blossom has determined that collectibility of lease payments is reasonably predictable and that no additional costs will be incurred. Assume both companies follow ASPE. Prepare the journal entries for the lessee and lessor at May 30, 2023, the inception of the lease, and at December 31, 2023, which is the year end for both the lessee and lessor. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Interest and depreciation expense calculations are based on the nearest full month.) Lessee: Date Account Titles and Explanation Debit Credit 30,2023 v Right-of-Use Asset Lease Liability ' Cash 266147 231147 35000 (To record lease payment) 31,2023 v Interest Expense 10646 I:I Obligations under Lease (To record interest) 31,2023 v Depreciation Expense 17743 I:I Accumulated Depreciation - U4 (To record depreciation expense) Lessor: Date Account Titles and Explanation Debit Credit r30,2023 V' ' Lease Receivable ' | Inventory 'Zl | 255501 ' Unearned Interest Income ' ||:| | 10646 (To record inception of lease) 130,2023 v ' Cash ' ' 35000 ' ' Lease Receivable ' ' ' 35000 (To record collection of lease payment) .31,2023 V' ' Unearned Interest Income e ' Interest Income (To record interest) O

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