The following facts are for a non-cancellable lease agreement between Carla Vista Corporation and Russell Corporation, a lessee:

Inception date July 1, 2020 Annual lease payment due at the beginning of each year, starting July 1, 2020 $ 20,585.16 Bargain purchase option price at end of lease term reasonably certain to be exercised by Russell $ 4,500.00 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $ 50,600.00 Fair value of asset at July 1, 2020 $ 90,200.00 Lessor's implicit rate 9% Lessee's incremental borrowing rate 9%