Pharoah Company, as lessee, enters into a lease agreement on July 1, 2021. for equipment. The following data are relevant to the lease agreement: 1. 2 The term of the noncancelable lease is 4 years, with no renewal option. Payments of $863,707 are due on July 1 of each year. The fair value of the equipment on July 1, 2021 is $3,050,000. The equipment has an economic life of 6 years with no salvage value Pharoah depreciates similar machinery it owns on the sum-of-the-years digits basis. The lessee pays all executory costs. Pharoah's incremental borrowing rate is 10% per year. The lesson is aware that the lessor used an implicit rate of 9% in computing the lease payments. 3. 4. 5 Prepare the journal entries on Pharoah's books that relate to the lease agreement for the following dates: (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to decimal places e.g. 5,250.) 1. 2. July 1, 2021 December 31, 2021 July 1, 2022 December 31, 2022 3. 4. Debit Date Account Titles and Explanation