On January 2, 2018, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $160,000 each, payable beginning January 2, 2018. Brick Co. agrees to guarantee the $100,000 residual value of the asset at the end of the lease term. Bricks incremental borrowing rate is 10%, however it knows that Gold Stars implicit interest rate is 8%. What journal entry would Brick Co. make at January 2, 2018 to record the lease?

PV Annuity Due PV Ordinary Annuity PV Single Sum

8%, 5 periods 4.31213 3.99271 .68508

10%, 5 periods 4.16986 3.79079 .62092

A)	Lease Equipment 598,449 Lease Liability 598,449

B) Leased Equipment 758,449 Cash 160,000 Lease Liability 598,449

C)	Leased Equipment 689,940 Cash 160,000 Lease Liability 529,940Leased Equipment 689,940 Cash 160,000 Lease Liability 529,940

D) Leased Equipment 707,342 Cash 160,000 Lease Liability 547,342