Crane Leasing Company signs an agreement on January 1, 2025, to lease equipment to Cullumber Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. 2. The cost of the asset to the lessor is $230,000. The fair value of the asset at January 1, 2025, is $230,000. 3. 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 $24,339, none of which is guaranteed. 4. The agreement requires equal annual rental payments, beginning on January 1, 2025. 5. Collectibility of the lease payments by Crane is probable.