ABC Company lease

· On January 1, 2013, ABC Company signed a 6-year, noncancelable lease for atruck. The terms of the leasecalled for ABC Company to make annual payments of $10,000 at the beginning of each year, startingJanuary 1, 2013. The truck has an estimated useful life ofseven years and zero residual value. The truck ownership reverts to the lessor at the end of the lease term. ABC Company uses the straight-line method of depreciationfor all of its assets. ABC Company's incremental borrowing rate is 9%, and the lessor’s implicit rate is unknown.