On January 1, 2019, Carius Corporation (lessee) entered into a lease agreement for a warehouse facility with Patel Storage, Inc. (lessor). The lease agreement calls for 6 equal lease payments of $15,000 to be made at the beginning of each year. Carius incremental borrowing rate and Patels implicit rate are both 7%.

The fair value of the facility at the leases inception is $270,000 and the estimated useful life is 20 years. There are no provisions for a purchase option and the equipment does not transfer to Carius at the end of the lease term. Patel will be able to lease the facility to another lessee after the conclusion of this lease term.

The following is the lease amortization schedule:

	Payment	Interest	Lease Liability Reduction	Lease Liability Remaining
				$ 76,503
1/1/2019	$ 15,000	$ -	$ 15,000	61,503
1/1/2020	15,000	4,305	10,695	50,808
1/1/2021	15,000	3,557	11,443	39,365
1/1/2022	15,000	2,756	12,244	27,120
1/1/2023	15,000	1,898	13,102	14,019
1/1/2024	15,000	981	14,019	-
	$ 90,000	$ 13,497	$ 76,503

Refer to the original problem, assume that Carius incurred initial direct costs associated with the lease agreement totaling $9,000. Prepare the January 1, 2019, entry for Carius to reflect the lease.