Sunland Corp. is a manufacturer of truck trailers. On January 1, 2021, Sunland Corp. leases 11 trailers to Cheyenne Company under a 6-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 Sunland Corp. with an 10% return on net investment. Titles to the trailers pass to Cheyenne at the end of the lease. 2. 3. The fair value of each trailer is $50,000. The cost of each trailer to Sunland Corp. is $46,100. Each trailer has an expected useful life of nine years. 4. Collectibility of the lease payments is probable.