On January 1, 2020, Ling Company acquired equipment on credit. The terms were $7,000 cash down payment plus payments of $5,000 on January 1 for each of the next three years. The implicit interest rate was 8%. The equipments list price was $22,000. Additional costs that were incurred to install the equipment included $1,000 to tear down and replace a wall and $1,500 to rearrange existing equipment to make room for the new equipment.

1) Determine the value at which Ling should report the acquired asset, and explain. If present value is included, show calculations.