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On January 1 , 2 0 2 4 , Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four - year period ending December

On January 1,2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31,2027, at which time possession of the leased asset will revert back to Aqua.
The equipment cost Aqua $433,521 and has an expected economic life of five years.
Aqua and Maywood expect the residual value at December 31,2027, to be $69,000.
Negotiations led to Maywood guaranteeing a $98,500 residual value.
Equal payments under the lease are $138,000 and are due on December 31 of each year with the first payment being made on December 31,2024.
Maywood is aware that Aqua used a 7% interest rate when calculating lease payments.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. & 2. Prepare the appropriate entries for Maywood on January 1,2024 and December 31,2024, related to the lease.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

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