The following facts pertain to a non-cancelable lease agreement between Wildhorse Leasing Company and Windsor Company,...

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The following facts pertain to a non-cancelable lease agreement between Wildhorse Leasing Company and Windsor Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $17,225.30 Bargain purchase option price at end of lease term $4,000 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $55,000 Fair value of asset at May 1, 2020 $77,000 Lessor's implicit rate 8 % Lessee's incremental borrowing rate 8 % The collectibility of the lease payments by Wildhorse is probable.

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