On January 1, 2021, Lopez Inc. leased manufacturing equipment from Huang for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Huang. The equipment cost Huang $210,000 and has an expected economic life of five years. Huang expects the residual value at December 31, 2024, to be $30,000. Negotiations led to Lopez guaranteeing a $40,000 residual value. Equal payments under the lease are $52,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Lopez is aware that Huang used a 5% interest rate when calculating lease payments.

Required: Prepare the appropriate journal entries for Lopez on January 1, 2021 and December 31, 2021, related to the lease.