Six years ago, Tidball Valuations Corp. leased office equipment. A $30,000 ROU asset was recognized at that time. Tidball depreciated the asset on a straight-line basis over the lease term. Provisions of the lease included a requirement to provide a $10,000 residual value guarantee. Tidball previously expected to pay out $7,000 under this guarantee. It is now January 1, 2019, and Tidball returned the leased equipment to the lessor. As the value of the equipment was only $4,000, Tidball paid $6,000 cash to settle the guarantee.

Required:

Prepare the journal entries to derecognize the right-of-use asset and lease liability on January 1, 2019.