On January 1, 2016, Watson Company Signed a Four-Year Lease

Multiple Choice

On January 1, 2016, Watson Company signed a four-year lease requiring annual payments of $45,000, with the first payment due on January 1, 2016. Watson's incremental borrowing rate was 7%. Actuarial information for 7% follows:
Assuming the lease qualifies as a capital lease, what amount should be recorded as leased equipment under capital leases on January 1, 2016 rounded to the nearest dollar) ?

A) $197,424
B) $163,094
C) $152,424
D) $184,509