In the long-term liabilities section of its balance sheet at December 31, 2011, Mene Co. reported a capital lease obligation of $75,000, net of current portion of $1,364. Payments of $9,000 were made on both January 2, 2012, and January 2, 2013. Mene’s incremental borrowing rate on the date of the lease was 11% and the lessor’s implicit rate, which was known to Mene, was 10%. In its December 31, 2012 balance sheet, what amount should Mene report as capital lease obligation, net of current portion?

a. $66,000

b. $73,500

c. $73,636

d. $74,250