The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.

Inception date:	May 1, 2014
Annual lease payment due at the beginning of
each year, beginning with May 1, 2014	$21,227.60
Bargain-purchase option price at end of lease term	$4,000
Lease term	5	years
Economic life of leased equipment	10	years
Lessors cost	$65,000
Fair value of asset at May 1, 2014	$91,000
Lessors implicit rate	10	%
Lessees incremental borrowing rate	10	%

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs.