Welby County Hospital Entered into a Capital Lease to Purchase

Welby County Hospital entered into a capital lease to purchase a new MRI machine. The capitalizable cost of the equipment was $400,000 and the hospital made a $40,000 down payment. The entry required when the asset was acquired was $\begin{array}{llr}&& \text {Debit}& \text {Credit}\\ \text {A.}& \text { Equipment}&\$400,000\\& \text {Other Financing Sources - Capital Lease}&&\$360,000\\& \text {Cash}&&40,000\\\\ \text {B. }& \text {Expenditures.}&\$400,000\\& \text {Other Financing Sources - Capital Lease}&&\$360,000\\& \text {Cash}&&40,000\\\\ \text {C.}& \text { Equipment}&\$360,000\\& \text {Expenditures}&40,000\\& \text {Lease Payable}&&\$360,000\\& \text {Cash}&&40,000\\\\ \text {D.}& \text {Equipment}&\$400,000\\& \text {Lease Payable}&&\$360,000\\& \text {Cash}&&40,000\end{array}$