On January $1,2024,$ Gravel Incorporated leased construction equipment from Rocky Mountain Leasing. Rocky Mountain Leasing purchased the equipment from Bishop Incorporated at a cost of $$1,916,316.$ Gravel's borrowing rate for similar transactions is $10\%.$

The lease agreement specified four annual payments of $$400,000$ beginning January $1,2024,$ the beginning of the lease, and at each December $31$ thereafter through $2026.$ The useful life of the equipment is estimated to be six years. The present value of those four payments at a discount rate of $10\%$ is $$1,394,740.$

On January $1,2026($after two years and three payments$),$ Gravel and Rocky Mountain agreed to extend the lease term by two years. The market rate of interest at that time was $9\%.$

Note: Use appropriate factors$)$ from the tables provided. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Required: $($Note: Round your answers to the nearest whole dollar amounts.$)$

$1.$ Prepare the appropriate journal entries for Gravel Incorporated on January $2026,$ to adjust its lease liability for the lease modification.

$2.$ Prepare all appropriate journal entries for Rocky Mountain Leasing on January $2026,$ to record the lease modification.

$3.$ Prepare all appropriate journal entries for Gravel Incorporated on December $31,2026,$ related to the lease.

$4.$ Prepare all appropriate journal entries for Rocky Mountain Leasing on December $31,2026,$ related to the lease.

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