Swifty Corporation enters into a $7-$year lease of equipment on December $31,2024,$ which requires $7$ annual payments of $$41,100$ each, beginning December $31,2024.$ In addition, Swifty guarantees the lessor a residual value of $$18,400$ at the end of the lease. However, Swifty believes it is probable that the expected residual value at the end of the lease term will be $$8,400.$ The equipment has a useful life of $7$ years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $$170,000.$

Prepare Lost Ark$$s $2024$ and $2025$ journal entries, assuming the implicit rate of the lease is $10\%$ and this is known to Swifty. $($Record journal entriesin the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired,select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries. For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answersto $0$ decimal places e$.$g$.5,275.)$

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Date Account Titles and Explanation Debit Credit

Lease Receivable

Cost of Goods Sold

Sales Revenue

Inventory

$($To record the lease$)$

Cash

Lease Receivable

$($To record receipt of lease payment$)$

Cash

Lease Receivable

Interest Revenue