Marin Leasing Company agrees to lease equipment to Headland 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 thenachinery is $$489,000,$ and the fair value of the asset on Jary $1,2025,$ is $$699,000.$

At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$60,000.$ Headland estimates that the expected residual value at the end of the lease will be $$60,000.$ Headland amortizes all of its leased equipment 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.

Marin desires a $9\%$ rate of return on its investments. Headland's incremental borrowing rate is $10\%,$ and the lessor's implicit rate is unknown.

A$)$ What is the annual rental payment?

B$)$ Whay is the present vlaue of minimum lease payments?

C$)$ prepare the journal entries headland wouod make in $2025$ and $2026$ related to the lease agreements

D$)$ suppose headlnad expects the residual value at the end of the lease term to be $$50000$ but still guarantees a residual of $$60000$ comput the value of the lease liability at lease commencement