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Rae Company purchased a new vehicle by paying $10,900 cash on the purchase date and...

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Accounting

Rae Company purchased a new vehicle by paying $10,900 cash on the purchase date and agreeing to pay $3,900 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 4%. The liability reported on the balance sheet as of the purchase date, after the initial $10,900 payment was made, is closest to

a) 78,700

b) 70,378

c) 82,278

d) 88,900

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