Current Attempt in Progress

On January $1,2025,$ Windsor Co$.$ leased a building to Wildhorse Inc. The relevant information related to the lease is as follows.

The lease arrangement is for $10$ years. The building is expected to have a residual value at the end of the lease of $$3,100,000($unguaranteed$).$

The leased building has a cost of $$3,600,000$ and was purchased for cash on January $1,2025.$

The building is depreciated on a straight$-$line basis. Its estimated economic life is $50$ years with no salvage value.

Lease payments are $$250,000$ per year and are made at the beginning of the year.

Wildhorse has an incremental borrowing rate of $9\%,$ and the rate implicit in the lease is unknown to Wildhorse.

Both the lessor and the lessee are on a calendar$-$year basis.

Click here to view factor tables.

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