Problem 21-3 (Part Level Submission) Winston Industries and Ewing Inc. enter into an agreement that requires E wing Inc. to build three diesel-electric engines to Winston's specifications. Upon completion of the engines, Winston has agreed to lease them for a period of 10 years and to assume a costs and risks of ownership. The lease is noncancelable, becomes effective on January 1, 2014, and requires annual rental payments of $446, 219 each January 1, starting January 1, 2014. Winston's incremental borrowing rate is 10%. The implicit interest rate used by Ewing Inc. and known to Winston is 10%. The total cost of building the three engines is $2,572,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Winston depreciates similar equipment on a straight-line basis. At the end of the lease, Winston assumes title to the engines. Collectibility of the lease payments is reasonably certain; no uncertainties exist relative to unreimbursable lessor costs