Cullumber Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $91.500. Under the 3-year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2020, Cullumber expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020