Gaby Corporation signed a five-year noncancelable finance lease for equipment on January 1, 2015. The first lease payment is January 1, 2015. Annual lease payment is $180 each year. The present value of the annual lease payments is $750. Term of the lease is five years with title passing to Gaby at the end of this period. Gaby uses the straight-line method of depreciation and amortization. Effective interest rate is 10%. Gaby should record in its 2015 income statement:

	A.	interest expense of $75 and amortization expense of $150.
	B.	interest expense of $57 and amortization expense of $107.
	C.	None of these answers is correct.
	D.	rent expense of $180.
	E.	interest expense of $57 and amortization expense of $150.