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On January 1, Electric Power Industries leased equipment under a capital lease that requires five separate payments of $25,000 at the end of each year.
On January 1, Electric Power Industries leased equipment under a capital lease that requires five separate payments of $25,000 at the end of each year. The first payment is due at the end of the year. Using a 12% discount rate, the present value of the lease liability is approximately $90,000. The amount reflected on Electric Power Industries' balance sheet on December 31 as lease liability will be closest to:
$80,500
$77,750
$75,800
143,200
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