On January 2, 2018, Pharoah Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $164000 each, payable beginning January 2, 2018. Brick Co. agrees to guarantee the $104000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 11%, however it knows that Pharoah's implicit interest rate is 9%. What journal entry would Pharoah make at January 2, 2018 assuming this is a direct-financing lease?

PV Annuity Due PV Ordinary Annuity PV Single Sum

9%, 5 periods 4.23972 3.88965 0.64993

11%, 5 periods 4.10245 3.69590 0.59345

Cash 164000

Lease Receivable 570521

Equipment 734521

Cash 64000

Lease Receivable 598907

Equipment 762907

Cash 164000

Lease Receivable 760000

Equipment 924000

Cash 164000

Lease Receivable 531314

Loss 228686

Equipment 924000