n December 31, 2023, Reagan Incorporated signed a lease with Silver Leasing Company for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2029. There is no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: December 31 Payments Interest Decrease in Balance Outstanding Balance 2023 $ 402,392 2023 $ 83,700 $ 83,700 318,692 2024 $ 83,700 $ 38,243 45,457 273,235 2025 $ 83,700 32,788 50,912 222,323 2026 $ 83,700 26,679 57,021 165,302 2027 $ 83,700 19,836 63,864 101,438 2027 $ 83,700 12,173 71,527 29,911 2029 $ 33,500 3,589 29,911 0 What is the balance of the lease liability on Reagan's balance sheet at December 31, 2025 (after the third lease payment is made)? Multiple Choice $222,323 $138,623 $189,535 $273,235