Oriole Leasing Company agrees to lease equipment to Waterway Corporation on January 1, 2020. 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 $518,000, and the fair value of the asset on January 1,2020 , is $648,000 : 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Waterway estimates that the expected residual value at the end of the lease term will be 50,000 . Waterway amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020 . 5. The collectibility of the lease payments is probable. 6. Oriole desires a 11% rate of return on its investments. Waterway's incremental borrowing rate is 12%, and the lessor's implicit rate is unknown. Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972 .) Annual rental payment