At January $1,2024,$ Caf$$ Med leased restaurant equipment from Crescent Corporation under a nine$-$year lease agreement.

The lease agreement specifies annual payments of $$22,000$ beginning January $1,2024,$ the beginning of the lease, and on each December $31$ thereafter through $2031.$

The equipment was acquired recently by Crescent at a cost of $$189,000($its fair value$)$ and was expected to have a useful life of $12$ years with no salvage value at the end of its life.

Because the lease term is only $9$ years, the asset does have an expected residual value at the end of the lease term of $$117,029.$

Crescent seeks a $10\%$ return on its lease investments