Current Attempt in Progress On January 1, 2020, Pharoah Company contracts to lease equipment for 5 years, agreeing to make a payment of $117,696 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $499,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Pharoah's incremental borrowing rate is 6%, and the implicit rate in the lease is 9%, which is known by Pharoah. Title to the equipment transfers to Pharoah at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables.