Canin Cranes Co. leased an asset under the following terms:

Annual lease payments $7,500

Asset's estimated useful life 8 years

Asset's fair market value $65,000

Lease term 4 years

Present value of lease payments $35,500

The lessee's entry to record the leased asset and lease acquired would include a

a) debit to right-of-use for $35,500.

b) debit to right-of-use for $40,000.

c) credit to lease liability for $7,500.

d) credit to lease payable for $7,500.