Sunland Company, a machinery dealer, leased a machine to Carla Vista Corporation on January $1,2025.$ The lease is for an $8-$year

period and requires equal annual payments of $$34,300$ at the beginning of each year. The first payment is received on January $1,2025.$

Sunland had purchased the machine during $2024$ for $$140,000.$ Collectibility of lease payments by Sunland is probable. Sunland set

the annual rental to ensure a $8\%$ rate of return. The machine has an economic life of $10$ years with no residual value and reverts to

Sunland at the termination of the lease. Assume that Carla Vista Corporation does not know the rate implicit in the lease used by

Sunland, and Carla Vista's incremental borrowing rate is $10\%.$ In addition, assume that Carla Vista incurs initial direct costs of

$$16,000.$Prepare all necessary journal entries for Carla Vista for $2025.$