On January 1, 2023, John Deer Co. leased rocket testing equipment from Sandia for a three-year period. Sandia purchased the equipment for $910,000, and it has a four-year economic life. John Deer and Sandia expect the rocket testing equipment to have a salvage value of $90,000 at the end of the lease term. John Deer agrees to guarantee a residual value of $120,000. The lease requires payments of $316,146 on December 31 of each year beginning December 31, 2023. Sandias implicit interest rate is 8% and is known by John Deer.

A. Prepare John Deers 1/1/2023 journal entry/entries related to the lease.

B. Prepare John Deers 12/31/2023 journal entry/entries related to the lease.

C. What would John Deers present on its 2023 Balance sheet related to the lease?