On January 1, Duncan Corporation Leased a Delivery Van, Agreeing

Multiple Choice

On January 1, Duncan Corporation leased a delivery van, agreeing to pay $10,575 every December 31 for the six-year life of the lease. The present value of the lease payments, at 6% interest, is $52,000. The lease is considered a capital lease. The general journal entry to record the acquisition of the delivery van is:

A) Debit Lease Expense $52,000; credit Lease Payable $52,000.
B) Debit Leased Asset-Delivery Van $52,000; credit Cash $52,000.
C) Debit Rent Expense $10,575; credit Lease Liability $10,575.
D) Debit Leased Asset-Delivery Van $52,000; credit Lease Liability $52,000.
E) No entry required until the first payment is made.