The following facts pertain to a non-cancelable lease agreement between Pharoah Leasing Company and Shamrock Company, a lessee. Commencement date June 1, 2020 Annual lease payment beginning with June 1, 2020 $46,962.82 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment (no salvage value) Lessor's cost Fair value of asset at June 1, 2020 $12,000 4 years 12 years $159,000 Lessor's implicit rate (known to lessee) Lessee's incremental borrowing rate $181,999.99 6 % 6 % The collectibility of the lease payments by Pharoah is probable. Click here to view factor tables, (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)