= Warehouse ease payments is reasonably predictable and no important uncertainties surro costs yet to be incurred by the lessor. The following information pertains to this lease agreement: g h e R e SR S ) ! | [ 136 U O [ ) (a) The agreement requires equal rental payments at the beginning of each year, - (b) The fair value of the building on January 1, 2025 is $5750000; however, the book value to Riverbed is $4700000. i (c) The building has an estimated economic life of 10 years, with no residual value. Carla Vista depreciates similar buildings using the straight-line method. (d) At the termination of the lease, the title to the bui Iding will be transferred to the lessee. (e) Carla Vista's incremental borrowing rate is 11% per year. Riverbed Warehouse Co. set the annual rental to ensure a 10% rate of return. The implicit rate of the lessor is known by Carla Vista, Inc. (f) In addition to the payments for the use of the leased asset, the lessor also requires the lessee to pay a yearly rental payment of A $14500 for executory costs related to taxes on the property