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 $425,660 and has an expected economic life of five years. Aqua and Maywood expect the residual value at December 31, 2027, to be $62,000. Negotiations led to Maywood guaranteeing a $88,000 residual value. Equal payments under the lease are $124,000 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.

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.