The following facts pertain to a non-cancelable lease agreement between Oriole Leasing Company and Sage Hill Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $20,703.86 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, 2020 $92,000 Lessors implicit rate 8 % Lessees incremental borrowing rate 8 % The collectibility of the lease payments by Oriole is probable