On January 1, 2018, Wildhorse Corporation signed a 10-year noncancelable lease for certain machinery. The terms of the lease called for Wildhorse to make annual payments of $235000 at the end of each year for 10 years with the title passing to Wildhorse at the end of this period. The machinery has an estimated useful life of 15 years and no salvage value. Wildhorse uses the straight-line method of depreciation for all of its fixed assets. Wildhorseaccordingly accounted for this lease transaction as a capital lease. The lease payments were determined to have a present value of $1426000 at an effective interest rate of 7%. With respect to this capitalized lease, Wildhorse should record for 2018

a. interest expense of $85820 and depreciation expense of $142600.

b. lease expense of $232000.

c. interest expense of $99820 and depreciation expense of $95067.

d. interest expense of $95067 and depreciation expense of $81733.