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On January $1,2025,$ Splish Company contracts to lease equipment for $5$ years, agreeing to make a payment of $$128,104$ at the beginning of each year, starting January $1,2025.$ The leased equipment is to be capitalized at $$572,000.$ The asset is to be amortized on a double$-$declining$-$balance basis, and the obligation is to be reduced on an effective$-$interest basis. Splish's incremental borrowing rate is $7\%,$ and the implicit rate in the lease is $6\%,$ which is known by Splish. Title to the equipment transfers to Splish at the end of the lease. The asset has an estimated useful life of $5$ years and no residual value.

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$($d$)$

Prepare the journal entry to record the lease payment of January $1,2026,$ assuming reversing entries are not made. $($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 enter $0$ for the amounts. Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answers to $0$ decimal places, e$.$g$.5,275.$ List debit entry before credit entry.$)$

Date Account Titles and Explanation

Debit

Credit

January $1,$

$2026$