Question $4$ of $4$

$\frac{0}{1\mathrm{.}25}$

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Rauch Incorporated leases a piece of equipment to Donahue Corporation on January $1,2025.$ The lease agreement called for annual rental payments of $$4,892$ at the beginning of each year of the $4-$year lease. The equipment has an economic useful life of $6$ years, a fair value of $$25,000,$ a book value of $$20,000,$ and both parties expect a residual value of $$8,250$ at the end of the lease term, though this amount is not guaranteed. Rauch set the lease payments with the intent of earning a $5\%$ return, and Donahue is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature.

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$($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

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What is the amount of the rental payments used in the lease agreement? $($Round answer to $0$ decimal places, e$.$g$.5,275.)$

Rental payments

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