Use the Following Information to Answer Questions
Jacquin Co -Assume Jacquin's Decides to Account for the Lease as a Asset

Multiple Choice

Use the following information to answer questions
Jacquin Co.leased an asset under the following terms: $\begin{array}{ll}\text { Annual lease payments } & \$ 7,500 \\\text { Asset's estimated useful life } & 8 \text { years } \\\text { Bargain purchase option } & \text { none } \\\text { Asset's fair market value } & \$ 65,000 \\\text { Transfer of title at end of lease } & \text { none } \\\text { Lease term } & 4 \text { years } \\\text { Present value of lease payments } & \$ 35,500\end{array}$
-Assume Jacquin's decides to account for the lease as a finance lease.The lessee's entry to record the leased asset and lease acquired would include a:

A) debit to asset under lease for $35,500.
B) debit to asset under lease for $40,000.
C) credit to lease obligation for $7,500.
D) credit to lease payable for $7,500.