On January 1,2016,Packard Corporation Leased Equipment to Hewlitt Company

On January 1,2016,Packard Corporation leased equipment to Hewlitt Company.The lease term is eight years.The first payment of $450,000 was made on January 1,2016.Remaining payments are made on December 31 each year,beginning with December 31,2016.The equipment cost Packard Corporation $2,400,000.The present value of the minimum lease payments is $2,640,000.The lease is appropriately classified as a sales-type lease.Assuming the interest rate for this lease is 10%,what will be the balance reported as a liability by Hewlitt in the December 31,2017,balance sheet?

A) $1,950,000.
B) $1,509,000.
C) $1,959,000.
D) $1,704,900.