On December 31, 2016, Continuous Computing leased a set of servers from Harry's Hardware with annual payments of $45,000 for 3 years.The servers are expected to have a useful life of 4 years and have an ordinary selling price of $140,000.Continuous Computing's average borrowing rate is 6%.On January 1, 2018, the lease is renegotiated to be extended by two years and lease payments increase to $65,000 per year, effective immediately.Harry's Hardware originally purchased the servers for $80,000 and depreciates all assets according to the straight-line method.