X leases an auto with a fair value of $27,704 from Y motors, on the following terms:

1. Non-cancelable terms of 50 months.

2. Rental of $600 per month ( at the beginning of each month). ( The present value at 0.5% per month is $26,618).

3. X guarantees a residual value of $1,200 ( the present value at 0.5% per month is $546). X expects the probable residual value to be $1,200 at the end of the lease term.

4. Estimated economic life of the automobile is 60 months

5. Xs incremental borrowing rate is 6% a year (0.5% a month). Yall implicit rate is unknown.

( for calculation purposes , use 5 decimal places as displayed in the table provided)

What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimal places , e.g. 5,275.)

please show your work and be at detailed as possible. Thank you!