Current Attempt in Progress Teal Mountain Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Sandhill Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. 3. 4. Sandhill has the option to purchase the equipment for $20,200 upon termination of the lease. It is not reasonably certain that Sandhill will exercise this option. The equipment has a cost of $167,000 and fair value of $191,900 to Teal Mountain Leasing. The useful economic life is 2 years, with a residual value of $20,200. Teal Mountain Leasing desires to earn a return of 6% on its investment. Collectibility of the payments by Teal Mountain Leasing is probable.