Leasing

On 1 April 20X7, Fino increased the operating capacity of its plant. On the recommendation of the finance director,
Fino entered into an agreement to lease the plant from the manufacturer. The initial measurement of the lease liability
is $350,000. The lease required four annual payments in advance of $100,000 each commencing on 1 April 20X7. The
rate of interest implicit in the lease is 10%. The lease does not transfer ownership of the plant to Fino by the end of the
lease term and there is no purchase option available.

What is the amount that should be shown under non-current liabilities at 30 September 20X7 in respect of this
plant?
A $175,000
B $262,500
C $250,000
D $100,000

I got $262,500. The book says it’s $175,000.

Why do they calculate the interest for six months instead of a year?