On July $1,2023,$ Cullumber Corp., which uses IFRS, signs a $4-$year, non$-$cancellable lease agreement to lease a equipment from Crane

Ltd$.$ The following information concerns the lease agreement.

The equipment's fair value on July $1,2023$ is $$256,000.$

The agreement requires equal rental payments of $$55,200\mathrm{.}00$ beginning on July $1,2023.$

The equipment has an estimated economic life of $5$ years, with an unguaranteed residual value of $$76,800.$ Cullumber Corp. depreciates similar equipment using the straight$-$line method, with no residual value.

The lease is non$-$renewable. At the termination of the lease, the equipment reverts to Crane.

Cullumber's incremental borrowing rate is $5\%$ per year. The lessor's implicit rate is not known by Cullumber Corp.

The yearly rental payment includes $$4,975\mathrm{.}04$ of executory costs related to insurance on the equipment. It is the company's policy to allocate executory costs between expense and prepaid amounts on the date of payment.

Interest and depreciation expenses are based on the nearest full month.

Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.