Current Attempt Skysong Leasing Company agrees to lease equipment to Concord Corporation on January 1, 2020. The following information relates to the lease agreement. 1 The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2 The cost of the machinery is $475,000, and the fair value of the asset on January 1, 2020, is $681,000. 3. 4. 5. 6. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Concord estimates that the expected residual value at the end of the lease term will be 50,000. Concord amortizes all of its leased equipment on a straight-line basis. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. The collectibility of the lease payments is probable. Skysong desires a 9% rate of return op its investments. Concord's incremental borrowing rate is 10%, and the lessor's implicit rate is unknown. (Assume the accounting period ends on December 31) Click here to view factor tables.