Wildhorse Ltd., which has a calendar year end, entered into an equipment lease on June 1, 2023, with Sandhill Financing Limited. The lease term is two years and requires payments of $3,800 at the end of each month beginning September 30. The stated rate of interest in the lease is 6%. As an incentive for entering into the contract, Sandhill has agreed to forgive the first three payments under the lease (June, July, and August).

Calculate the amount that Wildhorse should record for the lease obligation on June 1, 2023. Hint: Calculate the present value of the monthly payments as at September 1, 2023, and then discount this amount to June 1, 2023.

Lease obligation $