Computing Lease Liability Lessee Company enters into a year finance lease of

nonspecialized equipment with Lessor Company on January

Lessee has agreed to pay $ annually beginning immediately on

January The lessor estimates the residual value of the

equipment to be $ at lease end, but the lessee has not

guaranteed the residual value. The economic life of the asset is

years. The lessees incremental borrowing rate is and the

lessors implicit rate is not readily determinable by the lessee

company. What is the value of the lease liability on January

assuming that the lease is properly classified as a finance

lease?