Current Attempt in Progress

Crane Company leases a building to Blossom, Inc. on January $1,2025.$ The following facts pertain to the lease agreement.

The lease term is $4$ years, with equal annual rental payments of $$8,278$ at the beginning of each year.

Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a

specialized nature.

The building has a fair value of $$36,000,$ a book value to Crane of $$29,000,$ and a useful life of $5$ years.

At the end of the lease term, Crane and Blossom expect there to be an unguaranteed residual value of $$6,295.$

Crane wants to earn a return of $5\%$ on the lease, and collectibility of the payments is probable. This rate is known by Blossom.