Incorrect Question 4 0/20 pts On January 2, 2014, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning January 2, 2014. Brick Co. agrees to guarantee the $50,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%, however it knows that Gold Star's implicit interest rate is 8%. What journal entry would Brick Co. make at January 1, 2015 to record the second lease payment? (Hint: Add the present value of the guaranteed residual value to the present value of the payments) PV Annuity Due PV Ordinary Annuity. PV Single Sum 8%, 5 periods 4.31213 3.99271 10%, 5 periods 4.16986 3.79079 Dr. = Debit Cr. = Credit .68508 .62092 Dr. Lease Liability 80,000 Cr. Cash 80,000 Dr. Lease Liability 58,802 Dr. Interest Expense 21,198 Cr. Cash 80,000 Dr. Lease Liability 56,062 Dr. Interest Expense 23,938 Cr. Cash 80,000 Dr. Lease Liability 58,106 Dr. Interest Expense 21,894 Cr. Cash 80,000