On January 1,2014,Lessee Corporation Entered into a Ten-Year Lease Lessee Corporation Should Initially Capitalize the Lease at What Amount

On January 1,2014,Lessee Corporation entered into a ten-year lease.The lease terms required annual year-end payments of $160,000.The lease agreement does not contain either a bargain purchase option or a transfer of title.The fair value of the equipment at the inception of the lease was $1,100,000;estimated life of the leased assets was fourteen years.Lessee Corporation's incremental borrowing rate was 10%;the implicit rate of interest,known to the lessee,was 12%.Applicable time value of money values are as follows: $\begin{array}{ll}\text { Ten-year, } 10 \% \text { ordinary annuity } & 6.144 \\\text { Ten-year, } 12 \% \text { ordinary annuity } & 5.650 \\\text { Ten-year, } 10 \% \text { annuity due } & 6.759 \\\text { Ten-year, } 12 \% \text { annuity due } & 6.328\end{array}$
Lessee Corporation should initially capitalize the lease at what amount?

A) $0,the lease should not be capitalized
B) $983,040
C) $1,081,440
D) $904,000