Pharoah Company, a machinery dealer, leased a machine to Sheridan Corporation on January 1, 2025. The lease is for an 8-year period and requires equal annual payments of $27,300 at the beginning of each year. The first payment is received on January 1, 2025 . Pharoah had purchased the machine during 2024 for $150,000. Collectibility of lease payments by Pharoah is probable. Pharoah set the annual rental to ensure a 7% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Pharoah at the termination of the lease. Assume that Sheridan Corporation does not know the rate implicit in the lease used by Pharoah, and Sheridan's incremental borrowing rate is 9%. In addition, assume that Sheridan incurs initial direct costs of $19,000. (a) Your answer is correct. Compute the amount of the lease liability and right-of-use asset for Sheridan. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Lease liability $ Right-of-use asset $ Prepare all necessary journal entries for Sheridan for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and [