On January 1, 2016, 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 $34,500, payable at the beginning of each year. The interest rate implicit in the lease is 11%. Anderson agrees to pay all executory costs and is given an option to buy the equipment for $1 at the end