Pharoah Corp. is a manufacturer of truck trailers. On January 1, 2025, Pharoah leased nine trailers to Sheridan Company under a five- year noncancelable lease agreement. The following information about the lease and the trailers is provided: 1. Equal annual payments that are due on January 1 each year provide Pharoah with an 8% return on net investment (the present value factor on an annuity due for 5 periods at 8% is 4.31213). The first payment will be made January 1, 2025. 2 Titles to the trailers pass to Sheridan at the end of the lease. 3. 4. The fair value of each trailer is $55,000. The cost of each trailer to Pharoah is $49.500. Each trailer has an expected useful life of nine years. Collectibility of the lease payments is probable. Your answer has been saved. See score details after the due date. What type of lease is this for the lessor? Direct financing type lease Attempts: 1 of 1 used (b) Ci Calculate the annual lease payment. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places e.g. 5,275.) Annual lease payment $ Save for Later Attempts: 0 of 1 used Submit