Novak Limited has entered into an agreement to lease manufacturing equipment. The following terms are included in the lease:

Lease terms

$5$ years

Payments required monthly on the last day of the month $$3,114$

Leasing interest rate

$8\frac{\%}{?}$ annum

Estimated useful life of equipment

$5$ years

PV of lease payments

$$153,600$

The lease is entered into on January $1,2024.$ The equipment can be purchased for $$160,000.$ The company uses straight$-$line depreciation.

$($a$)$

Prepare the journal entry for $2024$ to recognize the lease. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entry before credit entry.$)$

Date

Account Titles

Debit

Credit

January $1,2024$