On January $1,20$X$5,$ Blaugh Co$.$ signed a long$-$term lease for an office building.

The terms of the lease required Blaugh to pay $$10,000$ annually, beginning December $30,205$ and continuing each year for $30$ years. The lease qualifies as a finance lease. On January $1,205,$ the present value of the lease payments is $$112,500$ at the $8\%$ interest rate implicit in the lease.

In Blaugh's December $31,20$X$5$ balance sheet, the finance lease liability should be

$$290,000.$

$$112,500.$

$$102,500.$

$$111,500.$