On January 1, 2021, OC Leasing Company (lessor) leased equipment to Golden Gate Corporation (lessee). The following information pertains to this lease. The term of the noncancelable lease is 4 years. The equipment reverts to OC Leasing at the end of the lease term Equal rental payments are due on December 31st of each year, beginning in 2021. The fair value and cost of the equipment to OC Leasing on January 1, 2021, are $250,000 and $200,000 respectively. The equipment has an economic life of 4 years, with a residual value of $60,000 that is unguaranteed. OC Leasing sets the annual rental to ensure a 9% rate of return. Golden Gate's incremental borrowing rate is 10%. OC leasing's implicit rate is known to Golden Gate. Collectability of lease payments is reasonably assured. Present value of an ordinary annuity of 1 for 4 periods at 9% is 3.23972 Present value of an annuity due of 1 for 4 periods at 9% is 3.53130 (6) Present value of 1 after 4 periods at 9% is 0.70843 (5) Present value of an ordinary annuity of 1 for 4 periods at 10% is 3.16986 Present value of an annuity due of 1 for