Cheyenne Industries and Ayayai Inc. enter into an agreement that requires Ayayai Inc. to build three diesel-electric engines to Cheyenne's specifications. Upon completion of the engines, Cheyenne 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, 2025, and requires annual rental payments of $377,226 each January 1, starting January 1, 2025. Cheyenne's incremental borrowing rate is 8%. The implicit interest rate used by Ayayai and known to Cheyenne is 6%. The total cost of building the three engines is $2,548,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Cheyenne depreciates similar equipment on a straight-line basis. At the end of the lease, Cheyenne assumes title to the engines. Collectibility of the lease payments is probable. Click here to view factor tables. Discuss the nature of this lease transaction from the viewpoints of both lessee and lessor. The lease should be treated as a by Cheyenne Industries. The lease should be treated as a by Ayayai Inc. Prepare the journal entry to record the transaction on January 1, 2025, on the books of Cheyenne (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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit Prepare the journal entry to record the transaction on January 1, 2025, on the books of Ayayai (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 0 for the amounts. Round answers to 0 decimal places e.g. 58,971. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2025. (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 0 for the amounts. List all debit entries before credit entries.) Prepare a lease amortization schedule for 2 years. (Round answers to 0 decimal places e.g. 58,971.) CHEYENNE INDUSTRIES/AYAYAI INCORPORATED Date 1/1/25 $ 1/1/25 1/1/26 1/1/27 Annual Lease Receipt/Payment Lease Amortization Schedule Interest on Receivable/Liability $ Reduction in Receivable/Liability $ Prepare the journal entries for both the lessee and lessor to record any entries needed in connection with the lease at December 31, 2025. (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 0 for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Lessee (December 31, 2025) (To record interest) Debit Credit (To record amortization) Lessor (December 31, 2025) Debit Credit Show the items and amounts that would be reported on the balance sheet (not notes) at December 31, 2025, for both the lessee and the lessor. CHEYENNE INDUSTRIES Balance Sheet (Partial) Asset