The following facts pertain to a non-cancelable lease agreement between Cullumber Leasing Company and Marin Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 May 1, 2020 $15,138.16 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 $50,000 Fair value of asset at May 1, 2020 $68,000 Lessor's implicit rate 8 % Lessee's incremental borrowing rate 8 % The collectibility of the lease payments by Cullumber is probable.