Question 10 of 10

Question 10 of 10 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. 3.33 / 5 Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Novak Company. The following information relates to this agreement. 2. 3. 4. 5. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. The fair value of asset at January 1, 2020, is $73,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $10,000, none of which is guaranteed. The agreement requires equal annual rental payments of $22,213.44 to the lessor, beginning on January 1, 2020. The lessees incremental borrowing rate is The lessor's implicit rate is 4% and is unknown to the lessee. Novak uses the straight-line depreciation method for all equipment. Click here to view factor tables.