Splish Brothers Corporation leases a building to Sunland, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $3,824 at the end of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. 4. 5. The building has a fair value of $34,900, a book value to Splish Brothers of $22,800, and a useful life of 15 years. At the end of the lease term, Splish Brothers and Sunland expect the residual value of the building to be $12,100, and this amount is guaranteed by Money, Inc., a third party. Splish Brothers wants to earn a 6% return on the lease, and collectibility of the payments is probable. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)