Problem $15-23($Algo$)$ Lessee and lessor; lessee guaranteed residual value $[$LO$15-2,15-7]$

On January $1,2024,$ Nguyen Electronics leased equipment from Nevels Leasing for a four$-$year period ending December $31,2027,$ at which time possession of the leased asset will revert back to Nevels.

The equipment cost Nevels $$817,934$ and has an expected economic life of five years.

Nevels expects the residual value on December $31,2027,$ will be $$111,000.$

Negotiations led to the lessee guaranteeing a $$162,000$ residual value.

Equal payments under the lease are $$211,000$ and are due on December $31$ of each year with the first payment being made on December $31,2024.$

Nguyen is aware that Nevels used a $8\%$ interest rate when calculating lease payments.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Required:

Prepare the appropriate entries for both Nguyen and Nevels on January $1,2024,$ to record the lease.

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