On January $1,2025,$ Oriole Company leased equipment to Pharoah Corporation. The following information pertains to this lease.

The term of the non$-$cancelable lease is $6$ years. At the end of the lease term, Pharoah has the option to purchase the

equipment for $$2,000,$ while the expected residual value at the end of the lease is $$9,000.$

Equal rental payments are due on January $1$ of each year, beginning in $2025.$

The fair value of the equipment on January $1,2025,$ is $$185,000,$ and its cost is $$120,000.$

The equipment has an economic life of $8$ years. Pharoah depreciates all of its equipment on a straight$-$line basis.

Oriole set the annual rental to ensure a $6\%$ rate of return. Pharoah's incremental borrowing rate is $8\%,$ and the implicit rate of

the lessor is unknown.

Collectibility of lease payments by the lessor is probable.

Both the lessor and the lessee's accounting periods end on December $31.$

Click here to view factor tables.

$($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

$($To record the lease$)$

$\frac{12}{31}\frac{?}{25}$

$($To record lease payment$)$

Prepare all the necessary journal entries for Oriole for $2025$