Skysong Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. | | The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. | 2. | | The cost of the asset to the lessor is $240,000. The fair value of the asset at January 1, 2020, is $240,000. | 3. | | The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,323, none of which is guaranteed. | 4. | | The agreement requires equal annual rental payments, beginning on January 1, 2020. | 5. | | Collectibility of the lease payments by Skysong is probable. | Click here to view factor tables. | | | |