Robbins, Inc. leased a machine from Ready Leasing Co.
The lease qualifies as a capital lease and requires ten annual payments
of $10,000 beginning immediately. The lease specifies an
interest rate of 12% and a purchase option of $10,000 at the end
of the tenth year, even though the machine?s estimated value on
that date is $20,000. Robbins? incremental borrowing rate is
14%.

The present value of an annuity due of one at

12% for ten years is 6.328

14% for ten years is 5.946

The present value of one at

12% for ten years is .322

14% for ten years is .270

What amount should Robbins record as lease liability at the beginning
of the lease term?

$62,160
$64,860
$66,500
$69,720