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

$1.$ The lease arrangement is for $10$ years. The building is expected to have a residual value at the end of the lease of $$2,500,000($unguaranteed$).$

$2.$ The leased building has a cost of $$3,000,000$ and was purchased for cash on January $1,2025.$

$3.$ The building is depreciated on a straight$-$line basis. Its estimated economic life is $50$ years with no salvage value.

$4.$ Lease payments are $$255,000$ per year and are made at the beginning of the year.

$5.$ Blossom has an incremental borrowing rate of $9\%,$ and the rate implicit in the lease is unknown to Blossom.

$6.$ Both the lessor and the lessee are on a calendar$-$year basis.