E21-4 (Lessor Entries, Direct-Financing Lease with Option to Purchase) Krauss Leasing Company sign a lease agreement on January 1, 2015, to lease electronic equipment to Stewart Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following informa tion relates to this agreement. 1. Stewart has the option to purchase the equipment for $16,000 upon termination of the lease. 2. The equipment has a cost and fair value of (240,000 to Krauss Leasing Company. The useful economic life is 2 years, with a residual value of (16,000. 3. Stewart Company is required to pay $7,000 each year to the lessor for executory costs. 4. Krauss Leasing Company desires to earn a return of 10% on its investment