On 1^st January 2018, Dragonland SAOG entered into an agreement to lease an item of equipment from a manufacturer for 6 years. The lease requires five annual payments of RO 50,000 each commencing from 1^st January 2018. The equipment would have a useful life of six years and with no residual value. The present value of the total lease payments is OMR 240,000. The cost of capital used is 14% find the interest to be charged to the income statement and the depreciation on the leased equipment for the year ended 31^st December 2018.

Interest charges OMR 33,600 depreciation OMR 48,000

Interest charges OMR 26,600 depreciation OMR 48,000

None of them

Interest charges OMR 26,600 depreciation OMR 40,000