A finance lease requires 8 annual payments of $25,000 with the first payment on January 1, at the beginning of the lease. The present value of the lease payments at 8% is $155,000. The LESSEE'S joirnal entry to record its second annual payment on December 31 would include:

a. Debit lease payable $14,600

b. Credit interest expense $25,000

c. Credit right-of-use asset $10,400

d. Debit cash $25,000