On January $1,$ Lessee Company leases equipment with a fair value of $$2,000$ from Lessor Company for $3$ years, with no renewal options. The estimated life of the equipment is $5$ years and there is no purchase option at the end of the lease term. The annual lease payment is $$700,$ which includes a $$50$ charge for an annual maintenance contract. The first payment is due immediately. Lessee Company$$s incremental borrowing rate is $6\%$ and the lessee is not readily able to determine the lessor$$s implicit interest rate. Title to the equipment remains with the lessor at lease end and the lessee does not guarantee the residual value at lease end.