On January $1,2024,$ Ghosh Industries leased a high$-$performance conveyer to Karrier Company for a four$-$year period ending December $31,2027,$ at which time possession of the leased asset will revert back to Ghosh.

The equipment cost Ghosh $$1,400,000$ and has an economic life of five

years.

Ghosh expects the residual value at December $31,2027,$ will be $$300,000.$

Negotiations led to the lessee guaranteeing a $$400,000$ residual value.

Equal payments under the finance$/$sales$-$type lease are $$300,000$ and are due on December $31$ of each year with the first payment being made on December $31,2024.$

Karrier is aware that Allied used a $4\%$ interest rate when calculating lease payments.

Required:

Prepare the appropriate entries for both Karrier and Ghosh on

January $1,2024,$ to record the lease.

Prepare all appropriate entries for both Karrier and Ghosh on December $31,2024,$ related to the lease.