Question 2 of 3 < 0.69/11 Lewis Corporation entered into a lease agreement on January 1, 2020, to provide Dawkins Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $10,521 to be made at the beginning of each year. 2. The machinery has a fair value of $55,000, a book value of $40,000, and an economic life of 8 years. At the end of the lease term, both parties expect the machinery to have a residual value of $30,000, none of which is guaranteed. 3. 4. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. 5. The implicit rate is 6%, which is known by Dawkins. Collectibility of the payments is probable. 7:4