On January 1, 2020, Adliya Company signs a 4 year lease contract to lease an equipment from Gulf Company The lease agre According to the agreement, the lessee is required to make annual retal payment of $480,000 begg from Jary 1, 2000 The lease cases the e provisions 1 The estimated economic life of the equipment is 5 year 2. At the inception of the lease, the fair value of the equipment is $1,680,000 3 Each annual rental payment includes $28,975 44 of executory costs relating to property tuses 4. The lessee's incremental borrowing rate is 10% The lessor's implicit rate u 8% and is known to the lesse 5. At the end of the lease term, the equipment will revert to the lessor, and at that time the equipment in expected to have ungrated dual value of n 6 Both, Adliya Company and Gulf Company, use the straight-line method for depreciation Additional information: The present value of an Ordinary Annuity of $1 and the present value of an Annuity Due of $1 for 5 perods at 8% 9% and 10% are as follows The present value of an Annuity Due of $1 Period 8% 996 10% 1 1.00000 1.00000 1.00000 2 1.92593 1.91743 1.90909 3 2.78326 2.75911 2.73554 4 3.57710 3.53129 3.48685 4.31221 4.23972 4.16987