OnJanuary 1, 20X6, Liberty Corp. (LC) entered into a lease agreement contract that entitled it to use equipment. Details ofthe contract follow: Lease payment, including the nonelease component $60,000 Nonelease component (maintenance agreement] included in lease payment $4,000 Implicit rate in the lease (readily determinable by lessee] 5% Incremental borrowing rate 6% Lease term 5 years Economic life of equipment 6 years Guaranteed residual value $i 0,000 Expected pay-out on residual value guarantee $8,000 Option to purchase . No First annual payment due LE Jan. 1, 20X6