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On 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
- On 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 | $ 519,115 | |||
| 2023 | $ 90,000 | $ 90,000 | 429,115 | |
| 2024 | $ 90,000 | $ 17,165 | 72,835 | 356,280 |
| 2025 | $ 90,000 | 14,251 | 75,749 | 280,531 |
| 2026 | $ 90,000 | 11,221 | 78,779 | 201,752 |
| 2027 | $ 90,000 | 8,070 | 81,930 | 119,822 |
| 2028 | $ 90,000 | 4,793 | 85,207 | 34,615 |
| 2029 | $ 36,000 | 1,385 | 34,615 | 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)?
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