Timmer Company signs a lease agreement dated January 1, 2016, that provides for it to lease equipment from Landau Company beginning January 1, 2016. The lease terms, provisions, and related events are as follows: The lease is noncancelable and has a term of 5 years. . The annual rentals are $83,222.92, payable at the end of each year, and provide Landau with a 12% annual rte of return on its net investment. . Timmer agrees to pay all executory costs at the end of each year. In 2016, these were insurance, $3,760; property taxes, S5,440. In 2017: insurance, $3,100; property taxes, $5,330. . There is no renewal or bargain purchase option. value. Ti estimates that the equipment has a fair value of $300,000, an economic life of 5 years, and a zero-residual mmer's incremental borrowing rate is 16%, it knows the rate implicit in the lease, and it uses the straight line method to record depreciation on similar equipment