On January $1,2023,$ Crane Corp., which uses IFRS, signs a $10-$year, non$-$cancellable lease agreement to lease a specialty lathe from Liu

Inc. The following information concerns the lease agreement.

The agreement requires equal rental payments of $$69,310$ beginning on January $1,2023.$

The lathe's fair value on January $1,2023,$ is $$470,000.$

The lathe has an estimated economic life of $12$ years, with an unguaranteed residual value of $$17,000.$ Crane depreciates

similar equipment using the straight$-$line method.

The lease is non$-$renewable. At the termination of the lease, the lathe reverts to the lessor.

Crane's incremental borrowing rate is $9\%$ per year. The lessor's implicit rate is not known by Crane.

The yearly rental payment includes $$2,121\mathrm{.}52$ of executory costs related to insurance on the lathe.

Assume this is a manufacturer$/$dealer lease.