On January 1, Year One, Company A leases a truck from Ford for its entire life of 5 years, for an annual payment of $20,000 to be paid on December 31 of each year. The first payment was made on December 31, Year One. A reasonable interest rate is determined to be 10 percent per year.

Determine the amount of lease liability reported by Company A on its December 31, Year One balance sheet.

Group of answer choices

$62,700

$64,700

$63,398

$80,000

$100,000