The following facts pertain to a non-cancelable lease agreement between Kingbird Leasing Company and Blossom 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 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% Lease term Lessee's incremental borrowing rate The collectibility of the lease payments by Kingbird is probable. 8 %