On January 1, 2016, Renee Corp., a lessee, signed a five-year capital lease for new equipment. The lease requires annual payments of $8,000. The first payment is due on December 31, 2016. Renee guaranteed a residual value of $2,000. On December 31, 2020, Renee returned the asset to the lessor, and the asset was appraised at a value of $1,500. Renee should record which of the following on December 31, 2020?

a. a $1,500 credit to leased equipment. b. a $500 debit to loss on disposal of leased equipment. c. a $500 debit to cash. d. a $1,500 credit to cash.