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 $510,000, and the fair value of the asset on January 1, 2020, is $717,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Waterway estimates that the expected residual value at the end of the lease term will be 60,000. 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. Waterways incremental borrowing rate is 12%, and the lessors implicit rate is unknown. (Assume the accounting period ends on December 31.)

(b) 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