Cheek Corp leases equipment from Tall Company on Jan $1,2025.$ The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers $3$ years of the equipment's $8-$year useful life, and the present value of the lease payments is less than $90\%$ of the fair value of the asset leased.

Prepare Cheek's journal entries on Jan $1,2025$ and Dec $31,2025.$ Assume the annual lease payment is $$43,000$ at the beginning of each year, and Cheek's incremental borrowing rate is $6\%,$ which is the same as the lessor's implicit rate.

$($to record lease liability$)$

$($to record lease payment$)$

$($other$)$