Bridgeport Leasing Company agrees to lease equipment to Indigo Corporation on January 1

Bridgeport Leasing Company agrees to lease equipment to Indigo 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 $518.000. and the fair value of the asset on January 1. 2020. is 5648.000. 3. At the end of the lease term. the asset reverts to the lessor and has a guaranteed residual value of 550.000. Indigo estimates that the expected residual value at the end of the lease term will be 50,000. Indigo 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. Bridgeport desires a 11% rate of return on its investments. Indigo's incremental borrowing rate is 12%. and the lessor's implicit rate is unknown. 
(Assume the accounting period ends on December 31) 
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Discuss the nature of this lease for both the lessee and the lessor. 
This is a 
This is a 
operating lease 
finance lease v 
eText book and Media 
List of Accounts 
for Indigo. 
for Bridgeport. 
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 es 58,9724 
Annual rental payment