GAAP standards

On January 1, 2021, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert bock to Allied. The equipment cost Allied $959.800 and has an expected useful life of five years. Allied expects the residual value at December 31, 2024, will be $303,800. Negotiations led to the lessee guaranteeing a $343,800 residual value. Equal payments under the finance/sales-type lease are $203,800 and are due on December 31 of each year with the first payment being made on December 31, 2021. Karrier is aware that Allied used a 6% interest rate when calculating lease payments. (FV of $1, PV of \$1. EVA of \$1, PVA of \$1, EVAD of \$1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for both Karrier and Allied on Januory 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease