Monterrey Properties enters into a 4-year lease for an automobile to be used in operation. The agreement obligates the company to make lease payments of $10,000 at the end of every year. Its useful economic life would be 8 years. Assume that the companys borrowing rate is 6%. The PV factor for 4 period, 6%, ordinary annuity is 3.4651.

What expenses will Monterrey record for thefirst year of the lease under IFRS?

	A.	Depreciation expense for $10,000.
	B.	Lease expense for $10,000.
	C.	Depreciation expense for $8,663 and Interest expense for $10,000.
	D.	Depreciation expense for $8,663 and Interest expense for $2,079.