?

On January 1, year 1, Babson, Inc. leased two automobiles for executive use. The lease requires Babson to make five annual payments of $13,000 beginning January 1, year 1. At the end of the lease term, December 31, year 5, Babson guarantees the residual value of the automobiles will total $10,000. The lease qualifies as a capital lease. The interest rate implicit in the lease is 9%. Present value factors for the 9% rate implicit in the lease are as follows:
For an annuity due with five payments 4.240
For an ordinary annuity with five payments 3.890
Present value of $1 for five periods 0.650
Babson’s recorded capital lease liability immediately after the first required payment should be