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 seis 10%, a Chen uses he straight e method of depreciation a of s fixed assets. its VS1, n . 5, 1-10% VAD, n-5, 1-10% VOA, n-5, 1-10% 62092 16987 3.79079 At December 31, Chen should record the following amount related to this capital lease: A. interest expense of $33,490. OB. interest expense of $45,490. C. interest expense of $38,038. OD. interest expense of $50,038