Repainting a fender on one of my dad's antique cars with the same lacquer it was originally repainted with several years ago. It's been awhile since I've used lacquer. I don't remember what grit paper to use to color sand and what compound to rub out with.

I like 400 then switch up to 600 and finally 1000. You can continue farther depending on what you are try to match.

It is much easier to sand thru or buff thru than modern paint, Stay completely away from edges and corners with the buffer running, Keep the pad cool, it will burn in a second...
When painting you are looking for a uniform satin finish, it will not give you that deep look like Urethane.. I typically over thin the top coat to smooth out the top coat.
I am not sure that the old style rubbing compound is even available anymore, I would use some modern Megquire;s diamond cut..
Here is my 68 Charger painted in Lacquer/ Clear in 1993