<b>How to make a Lantern
You need only one of each the following items for 1 Lantern.
-Hot coal (Coal + Flash dust)
To make a Hot coal, you need to purchase a Coal from the Sanhae smith (Gruff Smith). Say 'Coal' to the NPC in there.
Then buy a Flash dust from the Kugnae or Buya Arena.
Now use the SHIFT+I creation system. First add the Coal, then add the Flash dust. Press ok and you will get a Hot coal.
Now to make the actual Lantern, using the SHIFT+I Creation System.
First add the Beef (Ox1 or Kugnae snake cave drop).
Then add the Paper (From Kugnae Messenger 94,48.)
Then add the Ginko wood and finally add the Hot coal.
There you go!
Credit for this post goes to Ironrock!