e. What would be the value of the lease liability on January 1, 2020, if the lessor charged a market price for hazard insurance, which changed from year to year?

Note: Round amount to the nearest whole dollar.

Lease Liability = ?

Reporting Finance Lease, Guaranteed Residual-Lessee On the first day of its accounting year, January 1, 2020, Lessee Inc. leased a building at an annual payment of $138,848 to be paid at the beginning of each year for 10 years. The first payment was paid immediately. The building, which is new, cost $1,100,000 and has an estimated useful life of 12 years. The lessor's implicit rate is 6% and is known to Lessee Inc. The residual value of the building of $30,000 was guaranteed by Lessee Inc. who expects the residual value to approximate $20,000. Lessee Inc. incurred the following additional costs and received the following incentives pertaining to this lease: 0 Paid legal fees of $1,000 related to the execution of the lease. O Paid a fixed lease payment of $138,848 plus a $3,500 recurring payment to the lessor for hazard insurance on the building. O Received a lease incentive of $1,500 to sign the lease. Reporting Finance Lease, Guaranteed Residual-Lessee On the first day of its accounting year, January 1, 2020, Lessee Inc. leased a building at an annual payment of $138,848 to be paid at the beginning of each year for 10 years. The first payment was paid immediately. The building, which is new, cost $1,100,000 and has an estimated useful life of 12 years. The lessor's implicit rate is 6% and is known to Lessee Inc. The residual value of the building of $30,000 was guaranteed by Lessee Inc. who expects the residual value to approximate $20,000. Lessee Inc. incurred the following additional costs and received the following incentives pertaining to this lease: 0 Paid legal fees of $1,000 related to the execution of the lease. O Paid a fixed lease payment of $138,848 plus a $3,500 recurring payment to the lessor for hazard insurance on the building. O Received a lease incentive of $1,500 to sign the lease