Bonita Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Windsor Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Windsor Company has the option to purchase the equipment for $17,100 upon termination of the lease. 2. The equipment has a cost and fair value of $166,000 to Bonita Leasing Company. The useful economic life is 2 years, with a salvage value of $17,100. 3. Windsor Company is required to pay $4,900 each year to the lessor for executory costs. 4. Bonita Leasing Company desires to earn a return of 10% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.

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