K Co. has negotiated a lease arrangement for equipment that has been classified as a capital lease for accounting purposes. What can be done for tax purposes? 

Deduct the monthly payments as incurred. 

Deduct the value of the equipment in its entirety at the end of the lease. 

This lease cannot be deducted at all.

 Claim capital cost allowance only.

 Deduct the value of the equipment in its entirety at the beginning of the lease.