On 1 January 2018, a company which prepares financial statements to 31 December each year enters into a 4-year lease of a machine. The company is required to make four lease payments of 15,000 each. The interest rate implicit in the contract is 12% per annum. The following present value factor using 12% as a discount rate is provided:

The PV factor of the annuity in arrears of C1 for four years is 3.0375

The PV factor of the annuity in arrears of C1 for three years is 2.4018

The PV factor of the annuity in arrears of C1 for four years is 1.6901

The lease liability on 1 January 2018 is:

A.

45,562.5

B.

25,351.5

C.

36,027

D.

60,000