On January 2, 2021, Ivanhoe Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $162000 each, payable beginning January 2, 2021. Brick Co. agrees to guarantee the $159500 residual value of the asset at the end of the lease term. The expected value of the residual value is $57500. Bricks incremental borrowing rate is 10%, however it knows that Ivanhoes implicit interest rate is 8%. What journal entry would Brick Co. make at January 2, 2021 to record the lease?

PV Annuity Due	PV Ordinary Annuity	PV Single Sum
8%, 5 periods	4.31213	3.99271	0.68058
10%, 5 periods	4.16987	3.79079	0.62092

A

Right-of-Use Asset	716238
Cash		162000
Lease Liability		554238

B

Right-of-Use Asset	698565
Cash		162000
Lease Liability		536565

C

Right-of-Use Asset	605984
Lease Liability		605984

D

Right-of-Use Asset	767984
Cash		162000
Lease Liability		605984