Pepper, Inc. agrees to lease equipment from the Blue Corporation for $10$ years at $$25,000$ at the end of each year. The equipment has a fair value of $$175,000$ and an estimated useful life of $10$ years. The lease includes a guaranteed residual value of $$10,000.$ In addition to the lease payments, Pepper will pay $$5,000$ per year for a maintenance agreement. Pepper can finance this lease with its bank at a $12\%$ rate. The lessor's implicit lease rate, known to the lessee, is $10\%.$ The lessor and the lessee use ASC $842$ guidelines for lease accounting.

Present value interest factors are:

$\backslash$table$[[$PV factor of $$1$ for $10$ periods,$10\%,12\%$