Prasart Ltd purchased a rust-inhibiting machine by paying $25,000 cash on the purchase date and agreeing to pay $5,000 every three months during the next two years. The first payment is due three months after the purchase date. Prasart's borrowing rate is 12%.

The liability reported on the balance sheet as of the purchase date, after the initial $25,000 payment was made, is closest to:

$73,255.

$40,000.

$35,098.

$33,801.