ovelties and party Favors. During your inspection of the company garage, you di a used automobile not listed in the equipment subsidiary ledger is parked there cy Reeder, plant manager, about the vehicle, and she tells you that the company automobile because the company was only leasing it and elected to use the sho se accounting option for the lease. The lease agreement was entered into on Jan $0,$ with Crown New and Used Cars. You decide to review the lease agreement to lease should be afforded short$-$term lease treatment, and you discover the follo ms$.$

Non$-$cancelable term of $2$ years.

Rental of $$3,240$ per year $($at the end of each year$).($The present value at $8\%$ $$5,778.)$

Expected residual value after $2$ years is $$500.($The present value at $8\%$ per