Monty Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Flounder 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: 1. Flounder Company has the option to purchase the equipment for $17,400 upon termination of the lease. 2. The equipment has a cost and fair value of $155,000 to Monty Leasing Company. The useful economic life is 2 years, with a salvage value of $17,400. 3. Flounder Company is required to pay $4,500 each year to the lessor for executory costs. 4. Monty 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.