Libby Company Purchased Equipment by Paying $5,000 Cash on the Purchase

Libby Company purchased equipment by paying $5,000 cash on the purchase date and agreeing to pay $5,000 every six months during the next four years; the first payment is due six months after the purchase date.Libby's incremental borrowing rate is 8%.At what amount would the equipment be reported at on the balance sheet as of the purchase date?

A) $45,000
B) $38,664
C) $33,664
D) $40,000