On October 1, 2024, Sonoma Company leased equipment from Napa Incorporated in lease payable in five equal annual payments of $440,000, beginning October 1, 2025. Similar transactions have carried an 12% interest rate. The right-of-use asset would be recorded at:

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1,PVA of $1, FVAD of $1 and PVAD of $1)

$0.

$1,776,434.

$1,586,103.

$2,200,000.