Hi, please help with part a! Please provide the detailed solution of how you get this answer, and please answer the question follow the chart below. Thank you.

Exercise 21A-6 a b (Part Level Submission) Shamrock Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Pharoah Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1, 2. 3. Pharoah has the option to purchase the equipment for $17,500 upon termination of the lease. It is not reasonably certain that Pharoah will exercise this option. The equipment has a cost of $150,000 and fair value of $199,000 to Shamrock Leasing. The useful economic life is 2 years, with a residual value of $17,500. Shamrock Leasing desires to earn a return of 5% on its investment. Collectibility of the payments by Shamrock Leasing is probable. Click here to view the factor table