Franklin Co. leased its manufactured equipment to Parker Inc. for a 4-year term. Franklin Co. reported a book value of $121,000 for the equipment in its inventory account. The lease commenced on January 1, 2020, with the first annual payment of $40,700 due immediately. The equipment has a useful life of 4 years, an estimated fair value of $151,536, and no residual or salvage value. The implicit rate of the lease is 5% and collectibility of the lease payments from Parker is probable. Record Franklins journal entries at the commencement of the sales-type lease.