A18-28 Appendix A; Sales-Type Lease; Lessor: On 14 June 20X1, Bruckner Corp. entered into an agreement to lease materials-handling equipment from Mahler Inc. The five-year lease commences on 1 July 20X1. Bruckner will pay lease payments of $100,000 at the beginning of each lease year. Bruckner also guarantees a residual value of $50,000. Mahler is the manufacturer of the equipment Bruckner is leasing. The standard cost of manufacture is $350,000. The leased equipment normally sells for $480,000. When Mahler negotiates a lease with a customer, the company's expected rate of return varies with economic conditions and the cost of capital; currently, Mahler negotiates leases to obtain a return of 8%. Required: Prepare the appropriate entries for Mahler for 20X1 and 20X2 to record this lease, including the receipt of payments and the recognition of any revenues and expenses. Mahler has a 31 December fiscal year-end.