13. ASAP

Francisco leased equipment from Julio on December 31, 2024. The lease is a 10-year lease with annual payments of $157,000 due on December 31 of each year beginning December 31, 2024. The present value of the lease payments is $1,026,316. Francisco's incremental borrowing rate is 13% for this type of lease. The implicit rate of 11% is known by the lessee. What should be the balance in Francisco lease liability on December 31, 2025?

Multiple Choice

$814,451

$807,941

$804,441

$869,316