Use the following to answer questions 12 and 13:

Montana Inc. sells computer systems. Montana leases computers to Utah Company on June 30,

2021. The computers cost Montana $12 million to manufacture. The lease is non-cancelable and has the following terms:

Lease payments: $2,466,754 semiannually; first payment due June 30, 2021; remaining payments due December 31 and June 30 each year through December 31, 2025.

Lease term: 5 years (10 semi-annual payments).

No residual value; no bargain purchase option.

Economic life of equipment: 5 years.

Implicit interest rate and lessee's incremental borrowing rate: 10% per year.

Fair value of the computers at June 30, 2021: $20 million.

Collectability of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred.

_____ 12. The lease payable balance on Utah's books after the December 31, 2021 payment is closest to:

A)$15,943,154

B)$17,533,246

C)$21,000,000

D)$15,066,492

_____ 13. Total interest revenue Montana would report on its year end December 31, 2021 income statement relative to this lease is closest to:

A)$4,933,508

B)$1,673,820

C)$876,662

D)$2,466,754