Tex Corp enters into a $6$ year lease of equipment on Dec $31,2024,$ which requires $6$ annual payments of $$41,600$ each, beginning Dec $31,2024.$ In addition, Tex guarantees the lessor a residual value of $$19,800$ at t he end of the lease. However, Tex believes it is probable that the expected residual value at the end of the lease term will be $$9,800.$ The equipment has a useful life of $6$ years. Assume that for Shark company, the lessor, collectibility of the lease payments is probable and the carrying amount of the equipment is $$170,000.$

Prepare Shark's $2024$ and $2025$ journal entries $,$ assuming the implicit rate of the lease is $10\%$ and this is known to Tex.

$($to record the lease$)$

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

$($other$)$