Assume that on December $31,2024,$ Ivanhoe Aerospace signs a $8-$year, non$-$cancelable lease agreement to lease a hanger from Aero Field Management Company. The following information pertains to this lease agreement:

The agreement requires equal rental payments of $$159,660$ beginning on December $31,2024.$

The fair value of the building on December $31,2024$ is $$1,082,878.$

The building has an estimated economic life of $10$ years, a guaranteed residual value of $$50,900,$ and an expected residual value of $$36,100.$ Ivanhoe depreciates similar buildings on the straight$-$line method.

The lease is nonrenewable At the termination of the lease, the building reverts to the lessor:

Ivanhoe's incremental borrowing rate is $6\%$ per year. The lessor's implicit rate is not known by lvanhoe.