On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua.
∙ The equipment cost Aqua $412,184 and has an expected economic life of five years.
∙ Aqua and Maywood expect the residual value at December 31, 2027, to be $50,000.
∙ Negotiations led to Maywood guaranteeing a $70,000 residual value.
∙ Equal payments under the lease are $100,000 and are due on December 31 of each year with the first payment being made on December 31, 2024.
∙ Maywood is aware that Aqua used a 5% interest rate when calculating lease payments.

Required:
1. Prepare the appropriate entry for Maywood on January 1, 2024, to record the lease.
2. Prepare all appropriate entries for Maywood on December 31, 2024, related to the lease.