Using a financing lease arrangement, Florence leased equipment from Hector on January 1, 2020. Here are the facts

• Present value of minimum lease payments, also the FV of the asset is $1,020,000
• Annual payments of $150,000 are due on each January 1, starting January 1, 2020 at inception of the lease (this is an annuity due)
• Effective interest rate for the lease is 10%

What will be the balance of Florence's lease liability AFTER she makes the January 1, 2021 payment?

Group of answer choices

a. $933,000

b. $870,000

c. $792,000

d. $807,000