On January 1, 2020, Splish Brothers Co. leased a building to Sunland Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3,100,000 (unguaranteed). 2 The leased building has a cost of $3,600,000 and was purchased for cash on January 1, 2020. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4 Lease payments are $280,000 per year and are made at the beginning of the year. 5. Sunland has an incremental borrowing rate of 6%, and the rate implicit in the lease is unknown to Sunland. 6. Both the lessor and the lessee are on a calendar-year basis.