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 $$416,676$ and has an expected economic life of five years.

Aqua and Maywood expect the residual value at December $31,2027,$ to be $$54,000.$

Negotiations led to Maywood guaranteeing a $$76,000$ residual value.

Equal payments under the lease are $$108,000$ 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 $6\%$ interest rate when calculating lease payments.

Required:

$1.$ & $2.$ Prepare the appropriate entries for Maywood on January $1,2024$ and December $31,2024,$ related to the lease.