1 Technoid Inc sells computer systems Technoid leases computers to Lone Star Company on January 1, 2021 The manufacturing cost of the computers was $17 million This noncancelable lease had the following terms Lease payments $2,794,325 semiannually first payment at January 1, 2021 remaining payments at June 30 and December 31 each year through June 30, 2025 Lease term 5 years (10 semiannual payments) No residual value no purchase option Economic life of equipment 5 years Implicit interest rate and lessee's incremental borrowing rate 7 semiannually Fair value of the computers at January 1, 2021 $21 million What is the outstanding balance of the lease liability in Lone Star's June 30, 2021, balance sheet (Round your answer to the nearest whole dollar ) a $16,585,756 b $16,685,747 c $21,000,000 d None of these answer choices is correct

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Question: 1.Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $17 million.

1.Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $17 million. This noncancelable lease had the following terms:

Lease payments: $2,794,325 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025.
Lease term: 5 years (10 semiannual payments).
No residual value; no purchase option.
Economic life of equipment: 5 years.
Implicit interest rate and lessee's incremental borrowing rate: 7% semiannually.
Fair value of the computers at January 1, 2021: $21 million.

What is the outstanding balance of the lease liability in Lone Star's June 30, 2021, balance sheet? (Round your answer to the nearest whole dollar.)

a.$16,585,756.

b.$16,685,747.

c.$21,000,000.

d.None of these answer choices is correct.

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