Exhibit 20-1

On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000, beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9% and 10% are 4.48592 and 4.35526, respectively. 37.

Refer to Exhibit 20-1.

18.What would be the balance of the lease obligation for financial reporting purposes on December 31, 2017, after the lease payment (round answers to the nearest dollar)?

a- $194,383

b- $167,979

c- $190,192

d- $233,379