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On January 2, 2021, Oriole Leasing Company leases equipment to Foley Co. with 5 equal annual payments of $151000 each, payable beginning January 2, 2021.

On January 2, 2021, Oriole Leasing Company leases equipment to Foley Co. with 5 equal annual payments of $151000 each, payable beginning January 2, 2021. Foley Co. agrees to guarantee the $91000 residual value of the asset at the end of the lease term. The expected value of the residual is $0. Foleys incremental borrowing rate is 11%, however it knows that Orioles implicit interest rate is 9%. The journal entry Oriole makes at January 2, 2021 includes a debit to right-of-use asset for?

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

$673474

$694202

$973152

$699341

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