On January $1,2025,$ Cullumber Company leased equipment to Ivanhoe Corporation. The following information pertains to this lease.

The term of the non$-$capcelable lease is $6$ years. At the end of the lease term, Ivanhoe has the option to purchase the equipment for $$2,000,$ wile the expected residual value at the end of the lease is $$6,000.$

Equal rental payments are due on January $1$ of each year, beginning in $2025.$

The fair value of the equipment on January $1,2025,$ is $$170,000,$ and its cost is $$140,000.$

The equipment has an economic life of $8$ years. Ivanhoe depreciates all of its equipment on a straight$-$line basis.

Cullumber set the annual rental to ensure a $5\%$ rate of return. Ivanhoe's incremental borrowing rate is $6\%,$ and the implicit rate of the lessor is unknown.

Collectibility of lease payments by the lessor is probable.

Both the lessor and the lessee's accounting periods end on December $31.$

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

$($a$)$

Your answer is correct.

Indicate the nature of this lease to Cullumber and Ivanhoe.

The nature of this lease for Cullumber is a lease.

The nature of this lease for Ivanhoe is a lease.

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Attempts: $3$ of $8$ used

$($b$)$

Calculate the amount of the annual rental payment. $($Round answer to $0$ decimal places, eg$.5,275.)$

Annual rental payment $

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Attempts: $0$ of $8$ used

$($c$)$

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