Morgan Bakeries is involved in four different lease situations. Each of these leases is noncancelable, and in no case does Morgan receive title to the properties leased during or at the end of the lease term. All leases start on January 1, 2014,with the first rental due at the beginning of the year. Additional information is shown in the following table:

	(a)Harmon, Inc	(b)Arden's Oven Co.	(c)Mendota Truck Co.	(d)Appleland Computer
Type of Property	Cabinets	Ovens	Truck	Computer
Yearly Rental	$6,000	$15,000	$5,582.62	$3,557.25
Lease term	20 years	10 years	3 years	3 years
Est economic life	30 years	25 years	7 years	5 years
Purchase Option	none	$75,000 at the end of 10 years $4,000 at the end of 15 years	none	$3,000 at the end of 3 years, which approximates fair value
Fair value at inception of lease	$60,000	$120,000	$20,000	$10,000
Cost of asset to lessor	$60,000	$120,000	$15,000	$10,000
Residual value
Guaranteed	0	0	$7,000	0
Unguaranteed	$5,000	0	0	$3,000
Incremental borrowing rate of lessee	12%	12%	12%	12%
Executory costs paid by	Lessee $300 per year	Lessee $1,000 per year	Lessee $500 per year	Lessor Estimated to be $500 per year, included in lease payment
Present value of minimum lease payments
Using incremental borrowing rate of lessee	$50,194.68	$115,153.35	$20,000	$8,224.16
Using implicit rater of lessor	Not known	Not known	Not known	Know by lessee, $8,027.48
Estimated fair value at end of lease	$5,000	$80,000 at end of 10 years $60,000 at end of 15 years	Not available	$3,000