< Instructions On January 1, 2019, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: The lease is noncancelable and has a term of 8 years. The annual rentals are $32,900, payable at the beginning of each year. The interest rate implicit in the lease is 10%. Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for $1 at the end of the lease term, December 31, 2026. The cost of the equipment to the lessor is $157,000, and the fair value is approximately $193,100. Ballieu incurs no material initial direct costs. It is probable that Ballieu will collect the lease payments. Ballieu estimates that the fair value is expected to be significantly greater than $1 at the end of the lease term Ballieu calculates that the present value on January 1, 2019, of 8 annual payments in advance of $32,900 discounted at 10% is $193,070.99 (the $1 purchase option is ignored as immaterial). Required: