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.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 $$414,430$ and has an expected economic life of five years.

Aqua and Maywood expect the residual value at December $31,2027,$ to be $$52,000.$

Negotiations led to Maywood guaranteeing a $$73,000$ residual value.

Equal payments under the lease are $$104,000$ 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:

& $2.$ 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.

Journal entry worksheet

Record the beginning of the lease for Maywood Hydraulics.

Note: Enter debits before credits.

The equipment cost Aqua $$414,430$ and has an expected economic life of five years.

Aqua and Maywood expect the residual value at December $31,2027,$ to be $$52,000.$

Negotiations led to Maywood guaranteeing a $$73,000$ residual value.

Equal payments under the lease are $$104,000$ 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.