Franklin Co. leased its manufactured equipment to Parker Inc. for a 4-year term. Franklin Co. reported a book value of $110,000 for the equipment in its inventory account. The lease commenced on January 1, 2020, with the first annual payment of $37,000 due immediately. The equipment has a useful life of 4 years, an estimated fair value of $137,760, and no residual or salvage value. The implicit rate of the lease is 5% and collectibility of the lease payments from Parker is probable. Record Franklin’s journal entries at the commencement of the sales-type lease.

• Note: Round your answers to the nearest whole dollar.
• Note: List multiple debits or credits (when applicable) in alphabetical order

Date	Account Name	Dr.	Cr.
Jan. 1, 2020
	To derecognize asset and record investment lease
Jan 1, 2020
	To record cash lease payment