Kingston Corporation leases equipment from Falls Company on January $1,2025.$ 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$$s $8-$year useful life, and the present value of the lease payment is less than $90\%$ of the fair value of the asset leased. The annual lease payment is $$35,000$ at the beginning of each year, and Kingston$$s incremental borrowing rate is $6\%,$ which is the same as the lessor$$s implicit rate.

Prepare all the necessary journal entries for Falls Company $($the lessor$)$ for $2025,$ assuming the equipment is carried at a cost of $$200,000.$