The following information relates to an equipment lease with an inception date of January 1:

• Fair value of equipment at lease inception, $56,000
• Lease term, 5 years
• Economic life of property, 6 years
• Implicit interest rate, 7%
• Annual lease payment due on December 31, $13,200

The equipment reverts back to the lessor at the end of the lease term.

How much is recorded as the lease liability on the lease inception date?

Select one:

a. $66,000

b. $56,000

c. $57,911

d. $54,123