On January $2,2021,$ Hanson Leasing Company signed a non$-$cancelable contract to

leases equipment to Foley Co$.$ with $5$ equal annual payments of $$240,000$ each, payable

Chapter $20-$Examples.docx ary $2,2021.$ Foley Co$.$ agrees to guarantee the $$150,000$ residual value

ot the asset at the end of the lease term. The expected value of the residual is $$0.$ The

equipment has a $5-$year useful life and no salvage value. Foley's incremental borrowing

rate is $10\%,$ however it knows that Hanson's implicit interest rate is $8\%.$

Required:

Prepare all Foley Co$.\text{'}$s required journal entries from January $2,2021$ to January $1,2022.$