Lessee Company Enters into a Lease on January 1, 2018

Lessee Company enters into a lease on January 1, 2018, that is accounted for as a finance lease. The lease calls for quarterly payments of $15,000, beginning on January 1, 2018, and continuing for 5 years. The last payment is due on October 1, 2022. The lease has an implicit annual interest rate of 8%. The present value of an annuity due at 8% per period for 5 periods is 4.312; the present value of an annuity due at 2% per period for 20 periods is 16.678. What amount will Lessee report as a lease payable (not including accrued interest) in its financial statements dated December 31, 2018?

A) $198,720
B) $200,000
C) $203,658
D) $208,968