Concord Leasing Company agrees to lease equipment to Marigold Corporation on January $1,2025.$ The following information relates to the lease agreement.

$1.$ The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

$2.$The cost of the machinery is $$507,000,$ and the fair value of the asset on January $1,2025,$ is $$690,000.$

$3.$ At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$45,000.$ Marigold estimates that the expected residual value at the end of the lease term will be $$45,000.$ Marigold amortizes all of its leased equipment on a straight$-$line basis.

$4.$ The lease agreement requires equal annual rental payments, beginning on January $1,2025.$

$5.$ The collectibility of the lease payments is probable.

$6.$ Concord desires a $10\%$ rate of return on its investments. Marigold's incremental borrowing rate is $11\%,$ and the lessor's implicit rate is unknown.

$($Assume the accounting period ends on December $31.)$