East Company leased a new machine from North Company on May 1, 2010 under a lease with the following information: Lease Term 10 years Annual rental payable at the beginning of each lease year $40,000 Estimated life of machine 12 years Implicit interest rate 14% Present value of annuity of $1 in advance for 10 periods at 14% 5.95 Present value of $1 for 10 periods at 14% East has the option to purchase the machine at the end of the lease by paying $50,000, which approximates the expected value of the machine on the option exercise date. On May 1, 2010, East should record as capitalized leased asset of a. $251,500 b. $238.000 c. $224,500 d. 198,000