On January 1, 2024, Worcester Construction leased International Harvester equipment from Waltham LeaseCorp.
∙ Waltham LeaseCorp purchased the equipment from Wellesley Harvester at a cost of $958,158. Worcester’s borrowing rate for similar transactions is 10%.
∙ The lease agreement specified four annual payments of $200,000 beginning January 1, 2024, the beginning of the lease, and on each December 31 thereafter through 2026.
∙ The useful life of the equipment is estimated to be six years.
∙ The present value of those four payments at a discount rate of 10% is $697,370. On January 1, 2026 (after two years and three payments), Worcester and Waltham agreed to extend the lease term by two years. The market rate of interest at that time was 9%.

Required:
1. Prepare any appropriate entry(ies) for Worcester Construction on January 1, 2026, to record the lease modification.
2. Prepare all appropriate entries for Waltham LeaseCorp on January 1, 2026, to record the lease modification.
3. Prepare any appropriate entry(ies) for Worcester Construction on December 31, 2026, related to the lease.
4. Prepare all appropriate entries for Waltham LeaseCorp on December 31, 2026, related to the lease.