MetlockCompany leased equipment from Costner Company, beginning on December 31, 2019. The lease term is5years and requires equal rental payments of $75,477at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of5years, and no estimated residual value. The appropriate interest rate is9%.