On January 1, Year 1, Krayco, Inc. leased two scanner/copiers for its copy center use. The lease requires Krayco to make five annual payments of $17,000 beginning January 1, Year 1. At the end of the lease term, December 31, Year 5, the equipment has an expected residual value of $14,000. Krayco guarantees the residual value of the equipment to be $20,000. The lease qualifies as a finance lease. The interest rate implicit in the lease is 9%. Present value factors for the 9% rate implicit in the lease are as follows:

For an annuity due with 5 payments	4.240
For an ordinary annuity with 5 payments	3.890
Present value of $1 for 5 periods	0.650

Krayco's recorded lease liability immediately after the first required payment should be:

• A.

  $55,080

• B.

  $64,180

• C.

  $58,980

• D.

  $60,280