Recording Sales$-$Type Lease Journal Entries$-$ Residual Value

the end of the lease term. Smith estimates a residual value of $$30,000$ at the end of the lease term. Smith is aware of the lessor's implicit rate of interest of $7\%.$

$$450,000$ at the commencement of the lease.

Note: Round your answers to the nearest whole dollar. Smith, the lessee, signs an eight$-$year lease agreement on December $31$ for the floor of a building that requires annual payments of $$70,000,$ beginning immediately. The residual value of $$50,000$ is guaranteed to the lessor at the end of the lease term. Smith estimates a residual value of $$30,000$ at the end of the lease term. Smith is aware of the lessor$$s implicit rate of interest of $7\%.$

Prepare the lessor$$s journal entries on December $31$ to record the $(1)$ lease receivable and $(2)$ receipt of the first payment, assuming that the lease is properly classified as a sales$-$type lease. The carrying value of the equipment is $$450,000$ at the commencement of the lease.