On January 1, Chen Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Chen to make annual payments of $120,000, beginning at inception of the lease. Title will transfer to Chen at the end of the 5 year lease period. The equipment has an estimated useful life of 7 years and no salvage value. The effective interest rate for the lease is 10% and Chen uses the straight-line method of depreciation for its e assets. $1, -5, 1-10% 0.62092 NAD, n-5, 1-10% PVOA, n-5, 1-10% 3.79079 At December 31, Chen should record the following amount related to this capital lease: A. interest expense of $33,490 B. interest expense of $45,490 C. interest expense of $38,038 D. interest expense of $50,038