On December $31,2024,$ Larkspur Corporation signed a $5-$year, non$-$cancelable lease for a machine. The terms of the lease called for Larkspur to make annual payments of $$9,318$ at the beginning of each year, starting December $31,2024.$ The machine has an estimated useful life of $6$ years and a $$5,500$ unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Larkspur uses the straight$-$line method of depreciation for all of its plant assets. Larkspur's incremental borrowing rate is $6\%,$ and the lessor's implicit rate is unknown.

Compute the present value of the lease payments. $($For calculation purposes, use $5$ decimal places as displayed in the factor table provided and round final answer to $0$ decimal places e$.$g$.5,275.)$

Present value of the lease payments

$

Date $,$ Account Titles and Explanation

Debit

Credit

$($To record the rease$)$

$($To record first lease payment$)$

$($To record amortization of the right$-$of$-$use asset$)$