Adam Limited and Davies Limited Enter into a Finance Lease

Adam Limited and Davies Limited enter into a finance lease agreement with the following terms:
- lease term is 3 years
- estimated economic life of the leased asset is 6 years
- 3 × annual rental payments of $23 000 each payment is one year in arrears
- residual value at the end of the lease term is not guaranteed by the lessee
- interest rate implicit in the lease is 7%.
The period over which the asset should be depreciated by the lessee is:

A) 3 years.
B) 6 years.
C) the rate as determined by the Commissioner of Taxation.
D) not able to be determined from the information provided.