Brief Exercise 15-14 Residual value; sales-type lease (LO15-2, 15-3, 15-6] On January 1, James Industries leased equipment to a customer for a five-year period, at which time possession of the leased asset will revert back to James. The equipment cost James $770,000 and has an expected useful life of seven years. Its normal sales price is $770,000. The residual value after five years is $200,000. Lease payments are due on December 31 of each year, beginning with the first payment at the end of the first year. The interest rate is 5%. (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Calculate the amount of the annual lease payments. Guaranteed Residual Value Table or calculator function: n= Present value Amount to be recovered (fair value) Guaranteed residual value Amount to be recovered through periodic lease payments Lease Payment Table or calculator function: Lease Payments Amount of fair value recovered each lease payment