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Riverbed Leasing Company agrees to lease equipment to Marin Corporation on January 1, 2025. The following information relates to the lease agreement: 1. The term
Riverbed Leasing Company agrees to lease equipment to Marin Corporation on January 1, 2025. 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 1,2025 , 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. Marin estimates that the expected residual value at the end of the lease term will be $60,000. Marin amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 5. The collectibility of the lease payments is probable. 6. Riverbed desires a 11% rate of return on its investments. Marin's incremental borrowing rate is 12%, and the lessor's implicit rate is unknown. (Assume the accounting period ends on December 31.) Calculate the amount of the annual rental payment required. (Round present value foctor calculations to 5 decimal ploces, eg. 1.25124 and the final answer to 0 decimal places es. 58,972. .) Annual rental payment List of Accounts Attempts: 0 of 4 used
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