Illustrate what is the amount of the annual lease payment

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Bulldog Co. entered into an 8-year lease on January 1, 2011 with Craig Company. The leased asset had a fair market value of \$80,000. The lease agreement calls for annual payments to be made at the beginning of each year. Craig Company guarantees that the residual value of the asset will be at least \$10,000 at the end of the lease. Bulldog desires to earn 10% per year on the lease. Craig Company's incremental borrowing rate is 11%. What is the amount of the annual lease payment?

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