On January 2, 2021, Oriole Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $163000 each, payable beginning January 2, 2021. Brick Co. agrees to guarantee the $161000 residual value of the asset at the end of the lease term. The expected value of the residual value is $58000. Bricks incremental borrowing rate is 9%, however it knows that Orioles implicit interest rate is 7%. What journal entry would Brick Co. make at January 2, 2021 to record the lease?

On January 2, 2021, Oriole Leasing Company leases equipment to Brick Co.with 5 equal annual payments of $163000 each, payable beginning January 2 2021. Brick Co. agrees to guarantee the $161000 residual value of the asset at the end of the lease term. The expected value of the residual value is $58000. Brick's incremental borrowing rate is 9%, however it knows that Oriole's implicit interest rate is 7%. Whatjournal entry would Brick Co. make at January 2, 2021 to record the lease? PV Annuity Due PV Ordinary Annuity PV Single Sum 4.38721 4.10020 0.71299 79,5 periods 9%.5 periods 4.23972 3.88965 0.64993 625553 Right-of-Use Asset Lease Liability 625553 o Right-of-Use Asset 741771 Cash 163000 Lease Liability 578771 Right-of-Use Asset 788553 Cash 163000 Lease Liability 625553 Right-of-Use Asset 715115 Cash 163000 Lease Liability 552115