Vaughn Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $40,100 each, beginning December 31, 2019. In addition, Vaughn guarantees the lessor a residual value of $20,300 at the end of the lease. However, Vaughn believes it is probable that the expected residual value at the end of the lease term will be $10,300. The equipment has a useful life of 6 years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $160,000. Prepare Lost Arks 2019 and 2020 journal entries, assuming the implicit rate of the lease is 11% and this is known to Vaughn. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.)