41 On October 31, 20X5, Walsh Corp. (WC) signed a contract to rent an excavator for a 12-month period, details of which are set out below: Contract term: Implicit rate in lease: 12 months unknown by WC WC's incremental borrowing rate: 0.4% per month Payments: Useful life: $4,000 per month first due at the commencement date 10 years Residual value end of lease term: $150,000 (not guaranteed) $8,000 Residual value end of useful life: Transfer of title: No WC's policy is to adopt the recognition exemption to expense short-term leases whenever possible. The journal entry at the inception of the lease would include which of the following? Oa. Debit to rental expense Ob. Debit to right-of-use asset Oc Debit for $4,000 for $42,962 to right-of-use Od. Debit to right-of use asset for $46,962 asset for $4,000 QUESTION 42