On January 1, 2018, Rangers Company manufactures equipment with an estimated economic life of 12 years and leases it to Coyotes Company for a period of 10 years. The normal selling price of the equipment is 420,964, and its unguaranteed residual value at the end of the lease term is estimated to be $40,000 (present value is $15,422) Coyotes will pay annual payments of $60,000 at the beginning of each year (beginning on January 1, 2018 and the present value is $405,541). Rangers Company incurred costs of $270,000 in manufacturing the equipment. Rangers Company has determined that the collectability of the lease payments is reasonably predictable, that no additional cost will be incurred, and the implicit interest rate is 10%. The cost of sales is $