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Lessee Company enters into a six-year finance lease of nonspecialized equipment with Lessor Company on...

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Accounting

Lessee Company enters into a six-year finance lease of nonspecialized equipment with Lessor Company on January 1. Lessee has agreed to pay $30,000 annually beginning immediately on January 1. The lessor estimates the residual value
of the equipment to be $5,000 at lease end, but the lessee has not guaranteed the residual value. The economic life of the asset is seven years. The lessee's incremental borrowing rate is 7% and the lessor's implicit rate is not readily
determinable by the lessee company. What is the value of the lease liability on January 1, assuming that the lease is properly classified as a finance lease?
Lease liability: $
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