On January 1, 2023, Oriole Leasing Inc., a lessor that uses IFRS, signed an agreement with Rock River Inc., a lessee, for the use of a compression system. The system cost $417,000 and Oriole purchased it from Manufacturing Solutions Ltd. specifically for Rock River. Annual payments are made each January 1 by Rock River. In addition to making the lease payment, Rock River also reimburses Oriole $4,300 each January 1 for a portion of the repairs and maintenance expenditures, which cost Oriole a total of $6,400 per year. At the end of the five-year agreement, the compression equipment will revert to Oriole and is expected to have a residual value of $27,600, which is not guaranteed. Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs that have not yet been incurred by Oriole.