On January 1, 2018, Sauder Corporation (lessee) signed a five-year non-cancelable lease for equipment. The terms of the lease called for Sauder to make annual payments of $150,000 at the beginning of each year for five years starting on January 1, 2018. The equipment has an estimated useful life of 7 years and an expected residual value of $20,000. Sauder guaranteed a residual value of $35,000. Sauder uses the straight-line method of depreciation for all of its fixed assets. Sauder accordingly accounts for this lease transaction as a finance lease and its rate of returns is 12%. (round up to nearest $1) On January 2018, Sauder records the present value for the lease liability of .. Select one: a. $614,113 b. $605,602 c. $597,091 d. $150,000