$!!!$### Assume that on January $1,2025,$ Elmer's Restaurants sells a computer system to Pharoah Finance Co$.$ for $$780,000$ and immediately leases back the computer system. The relevant information is as follows.

$1$ The computer was carried on Elmer's books at a value of $$700,000.$

$2$ The term of the non$-$cancelable lease is $3$ years; title will not transfer to Elmer's, and the expected residual value at the end of the lease is $$550,000,$ all of which is unguaranteed.

$3.$ The lease agreement requires equal rental payments of $$115,490$ at the beginning of each year

$4.$ The incremental borrowing rate for Elmer's is $5\%.$ Elmer's is aware that Pharoah Finance set the annual rental to ensure a rate of return of $5\%$

$5.$ The computer has a fair value of $$780,000$ on January $1,2025,$ and an estimated economic life of $10$ years

Prepare the journal entries for both the lessee and the lessor for $2025$ to record the sale and leaseback agreement. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round answers to O decimal places, e$.$g$.5,275.$ Lht all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is requined