Exercise 21-4 Castle Leasing Company signs a lease agreement on January 1, 2014, to lease electronic equipment to Jan Way Company. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 0 0 1. Jan Way has the option to purchase the equipment for $16,580 upon termination of the lease 2. The equipment has a cost and fair value of $149,700 to Castle Leasing Company. The useful economic life is 2 years, with a salvage value of $16,580 3. Jan Way Company is required to pay $5,410 each year to the lessor for executory costs. 4, Castle Leasing Company desires to earn a return of 10% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. 8 TABLE6-2 PRESENT VALUE OF 1 11% 91743 84168 15% 88957 75614 81162 73119 79719 75132 03552 50743 57175 49718 63017 54703 50187 51316 40388 32197 26748 22917 42410 35218 31728 25751 40319 24719 39711 4133 31524 27454 29169 27027 25187 23107 21190 21763 7988 17843 08110