Refer to the preceding facts for Presss acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2016, Press held merchandise acquired from Simon for $10,000. During 2016, Simon sold $40,000 worth of merchandise to Press. Press held $12,000 of this merchandise at December 31, 2016. Press owed Simon $6,000 on December 31 as a result of this intercompany sale. Simon has a gross profit rate of 25%. On January 1, 2016, Simon signed a 5-year lease with Press for the rental of equipment, which has a 5-year life. Payments of $23,363 are due each January 1, and there is a guaranteed residual value of $10,000 at the end of the five years. The market value of the equipment at the inception of the lease was $100,000. Press has a 12% implicit rate on the lease. The following amortization table was prepared for the lease. Period Payment Interest Principal Balance Jan. 1, 2016 $23,363 $(23,363) $76,637 Jan. 1, 2017 23,363 $9,196 (14,167) 62,470 Jan. 1, 2018 23,363 7,496 (15,867) 46,603 Jan. 1, 2019 23,363 5,592 (17,771) 28,832 Jan. 1, 2020 23,363 3,460 (19,903) 8,929 Jan. 1, 2021 10,000 1,071 (8,929) 0