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

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

The cost of the machinery is $$489000,$ and the fair value of the asset on January $1,2025,$ is $$699000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $560,000.$ Swifty estimates that the expected residual value at the end of the lease term will be $$60,000.5$ wifty amortizes all af its leased ecauipment on a straight$-$line basis.

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

The collectibility of the lease payments is probable.

Marigold desires a $9\%$ rate of return on its investments. Swfty$\text{'}$s incremental borrowing rate is $10\%,$ and the lessor's implicit rate is unknown.