On January 1, 2021, Obermax Corporation agreed to lease a piece of equipment to a customer for 10 years. The lease qualified as a finance/sales-type lease with a 6% implicit interest rate. The customer agreed to make a payment of $8,000 at the beginning of each year, the first payment being made on January 1, 2021.

The journal entry Obermax should recognize at the inception of the lease includes:

Multiple Choice

• a debit to lease receivable of $80,000.

• a debit to lease receivable of $62,414.

• a debit to lease receivable of $58,881.

• a credit to interest revenue of $3,265.