On January 2, 2021, Sandhill Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $156000 each, payable beginning January 2, 2021. Brick Co. agrees to guarantee the $151000 residual value of the asset at the end of the lease term. The expected value of the residual value is $55000. Bricks incremental borrowing rate is 9%, however it knows that Sandhills implicit interest rate is 7%. What journal entry would Brick Co. make at January 1, 2022 to record the second lease payment?

	PV Annuity Due	PV Ordinary Annuity	PV Single Sum
7%, 5 periods	4.38721	4.10020	0.71299
9%, 5 periods	4.23972	3.88965	0.64993

Lease Liability	114220
Interest Expense	41780
Cash		156000

Lease Liability	102283
Interest Expense	53717
Cash		156000

Lease Liability	156000
Cash		156000

Lease Liability	114644
Interest Expense	41356
Cash		156000