Brigger Construction Inc. manufactures a front loader with an estimated life of 10 years and leases it to Colorado for a period of 8 years. The normal selling price of the machine is $169,579, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $8,000. Old Mill will pay rents of $25,000 at the beginning of each year. Brigger incurred costs of $131,000 in manufacturing the machine and $4,500 in legal fees directly related to the signing of the lease. Brigger has determined that the collectability of the lease payments is probable and that the implicit interest rate is 6%. Colorado has an incremental borrowing rate of 6% and an expected residual value at the end of the lease of $6,000.