On January 3, 2016, the Walters Corporation Signed a 10-Year

On January 3, 2016, the Walters Corporation signed a 10-year non-cancelable lease for manufacturing equipment. The fair value of the equipment at that time was $550,000. At the end of the lease period, the equipment, which has an estimated life of 15 years, will be returned to the lessor. Additional information is below: Walters should

A) capitalize the equipment at $550,000.
B) capitalize the equipment at $491,565.
C) capitalize the equipment at $452,018.
D) not capitalize the equipment.