On January 2, 2018, Jackie Leasing Company leases equipment to SH Co. with 5 equal annual payments of $260,000 each, payable beginning January 2, 2018. SH Co. agrees to guarantee the $70,000 residual value of the asset at the end of the lease term. SH's incremental borrowing rate is 10%, however it knows that Jackie's implicit interest rate is 8%. What journal entry would Jackie make at January 2, 2018 assuming this is a direct-financing lease? PV Annuity Due PV Ordinary Annuity. PV Single Sum 8%, 5 periods .68508 4.31213 3.99271 10%, 5 periods .62092 4.16986 3.79079 Cash 260,000 Lease Receivable 718,107 a. Equipment 978,107 Cash 260,000 Lease Receivable 909,109 O b. Equipment 1,169,109 Cash 260,000 Lease Receivable 1,012,368 Equipment 1,272,368 Cash 260,000 Lease Receivable 897,255 d. Equipment 1,157,255