Pepper, Inc -The Entry to Record This Lease on Pepper's Books Is

Pepper, Inc. agrees to lease equipment from the Blue Corporation for 10 years at $25,000 at the end of each year. The equipment has a fair value of $175,000 and an estimated useful life of 10 years. The lease includes a guaranteed residual value of $10,000. In addition to the lease payments, Pepper will pay $5,000 per year for a maintenance agreement. Pepper can finance this lease with its bank at a 12% rate. The lessor's implicit lease rate, known to the lessee, is 10%.
Present value interest factors are:
$$\begin{array} { l c c } & \underline { \mathbf { 1 0 \% } } & \underline { \mathbf { 1 2 \% } } \\\text { PVIF \$1 } 10 \text { periods } & 0.38554 & 0.32197 \\\text { PVIF Annuity } 10 \text { periods } & 6.14457 & 5.65022\end{array}$$
-The entry to record this lease on Pepper's books is (Round all calculations to the nearest whole dollar amount.)

A) DR Leased equipment-Capital lease $~~~~~~~$ 144,475
$~~~~~~~~$ CR Obligation under capital lease $~~~~~~~~$$~~~~~~~~$ 144,475
B) DR Leased equipment-Capital lease $~~~~~~~~$ 157,469
$~~~~~~~~$ CR Obligation under capital lease $~~~~~~~~$$~~~~~~~~$ 157,469
C) DR Leased equipment-Capital lease $~~~~~~~~$$~~~~~~~~$ 157,469
DR Discount on lease obligation $~~~~~~~~$$~~~~~~~~~~~~~~~$ 92,531
$~~~~~~~~$ CR Obligation under capital lease $~~~~~~~~$$~~~~~~~~$$~~~~~~~~$$~~~~~~~~$ 250,000
D) DR Leased equipment - Capital lease $~~~~~~~~$ 167,469
DR Discount on lease obligation $~~~~~~~~$$~~~~~~~~$ 82,531
$~~~~~~~~$ CR Obligation under capital lease $~~~~~~~~$$~~~~~~~~$$~~~~~~~~$ 250,000