First, after opening Photoshop, create a new layer and fill it with red.
Select the single-column selection tool in the toolbox and click on the image to display a selection. Then select the yellow foreground color to fill the selection.
After filling, a yellow line appears in the image. Use the selection tool, hold down the Ctrl and Alt keys at the same time, and drag the yellow selection. Several yellow lines will be copied in the image and arranged evenly in the image.
Select the Ellipse tool, draw an elliptical selection in the image, then select Inverse Selection, and click the Delet key to delete the part outside the elliptical selection.
Use the text tool to write the word "福" in the oval. If you want the lantern to display other words, you can also enter them according to your needs. Then choose the font and size that you are satisfied with.
Merge the "Fu" layer with layer one, and apply Filter-Distort-Spherization effect to the merged layer. In the window that appears, select the parameter to 100% and normal mode. If you feel the effect is not obvious, you can repeat it several times to achieve the appropriate effect.