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Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Marin Company. The following information relates to this agreement. 1. The

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Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Marin Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1,2020 , is $85,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. 4. The agreement requires equal annal rental payments of $27,911 to the lessor, beginning on January 1, 2020. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. 6. Marin uses the straight-line depreciation method for all equipment. 1/1/20 1/1/21 1/1/22

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