Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January $1,2024.$ The following information Prepare lessee's and lessor's journal entries on the following dates:

Glaus $($Lessor$)$

January $1,2024$

December $31,2024$

January $1,2025$

relates to the lease agreement.

The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

The cost of the machinery is $$525,000,$ and the fair value of the asset on January $1,2024,$ is $$700,000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$50,000.$ Jensen

estimates that the expected residual value at the end of the lease term will be $$50,000.$ Jensen amortizes all of its leased

equipment on a straight$-$line basis.

The lease agreement requires equal annual rental payments each January $1,$ beginning on January $1,2024.$

The collectibility of the lease payments is probable.

The implicit rate of interest is $5\%.$

Compute lease payment $($show lessor's calculation$)$:

Complete amortization schedule: