On January 1, 2018, Carla Vista Corporation signed a 10-year noncancelable lease for certain machinery. The terms of the lease called for Carla Vista to make annual payments of $220000 at the end of each year for 10 years with the title passing to Carla Vista at the end of this period. The machinery has an estimated useful life of 15 years and no salvage value. Carla Vista uses the straight-line method of depreciation for all of its fixed assets. Carla Vista accordingly accounted for this lease transaction as a capital lease. The lease payments were determined to have a present value of $1718000 at an effective interest rate of 7%. With respect to this capitalized lease, Carla Vista should record for 2018- (choose the correct answer

a)lease expense of $240000.

b)interest expense of $120260 and depreciation expense of $114533.

c)interest expense of $106260 and depreciation expense of $171800.

d)interest expense of $114533 and depreciation expense of $101200.