Assume That a Company Leases Equipment for a 5-Year Period

Assume that a company leases equipment for a 5-year period under a capital lease and agrees to pay an annual rental of $16,000 at the end of each year. If the present value of the lease payments is $59,200, the entry to record the leasing transaction would include

A) A debit to Lease Expense of $59,200
B) A debit to Leased Equipment of $59,200
C) A debit to Leased Equipment of $80,000
D) A credit to Rent Payable of $16,000