On January $1,2021,$ OC Leasing Company $($lessor$)$ leased equipment to Golden Gate Corporation $($lessee$).$ The following information pertains to this lease.

The term of the noncancelable lease is $4$ years. The equipment reverts to OC Leasing at the end of the lease term

Equal rental payments are due on December $31$st of each year, beginning in $2021.$

The fair value and cost of the equipment to OC Leasing on January $1,2021,$ are $$250,000$ and $$200,000$ respectively.

The equipment has an economic life of $4$ years, with a residual value of $$60,000$ that is unguaranteed.

OC Leasing sets the annual rental to ensure a $9\%$ rate of return. Golden Gate$$s incremental borrowing rate is $10\%.$ OC leasing$$s implicit rate is known to Golden Gate. $$ Collectability of lease payments is reasonably assured.

Present value of an ordinary annuity of $1$ for $4$ periods at $9\%$ is $3\mathrm{.}23972$

Present value of an annuity due of $1$ for $4$ periods at $9\%$ is $3\mathrm{.}53130(6)$

Present value of $1$ after $4$ periods at $9\%$ is $0\mathrm{.}70843(5)$

Present value of an ordinary annuity of $1$ for $4$ periods at $10\%$ is $3\mathrm{.}16986$

Present value of an annuity due of $1$ for $4$ periods at $10\%$ is $3\mathrm{.}48685$

Present value of $1$ after $4$ periods at $10\%$ is $0\mathrm{.}68301$