A18-4 Lessee Accounting: On 31 December 20X6 Joseph's Renovations Ltd. (JRL) entered into a lease to rent construction equipment that had the following terms: JRL's incremental borrowing rate is 8%; prime rate is 6%; and the implicit rate known by JRL is 9%; The equipment's fair value on 31 December 20X6 is $250,000 with a useful life of eight years and a residual value guarantee of $50,000: The lease term is for a period of five years with annual payments at the beginning of the year, The asset reverts back to the lessor at the end of the lease term and the expected payment under the guarantee is $20,000. Required: Prepare journal entries for the 20X6 and 20X7 fiscal years for Joseph's Renovations Ltd