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

Inception date:

May 1, 2017

Annual lease payment due at the beginning of

each year, beginning with May 1, 2017

$22,157.08

Bargain-purchase option price at end of lease term

$4,200

Lease term

5yearsEconomic life of leased equipment

10yearsLessor's cost

$68,000

Fair value of asset at May 1, 2017

$95,000

Lessor's implicit rate

10%Lessee's 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.

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(a)

Compute the amount of the lease receivable at the inception of the lease.