6) The Lessee Company signs a lease with the Lessor Company to lease certain equipment for a period of 8 years. The terms of the lease agreement require annual lease payments of $1,000 (no executory costs), payable at the end of each year. The cost of the equipment to the Lessor Company was $4,968. The lessee's incremental borrowing rate is 12%. The equipment has an estimated life of 8 years. You have been asked to prepare a schedule comparing the effects on the Lessee Company's financial statements under alternative methods of accounting for the lease. Which of the following is not a correct statement: A) If the lease is classified as an Operating Lease, the lease rental expense to be recognized each year will be $1,000. B) If the lease is classified as an Operating Lease, the lease agreement will be recognized as both an asset and liability on the Lessee Company's balance sheet. C) If the lease is classified as a Finance Lease, the total interest expense to be charged against income over the 8-year term of the lease will be $3,032. D) If the lease is classified as a Finance Lease, the total expense (i.e., interest plus straight-line depreciation) to be charged against income during the first year the lease agreement is in effect will be $1.097. E) If the lease is classified as a Finance Lease, the reported value of lease payable (i.e., obligation under finance lease) at the end of the first year will be $4,564