Quattro Corporation signed a lease from Cinco Leasing Company on July $1,$ Year $1,$ for equipment having a five$-$year useful life.

The lease does not include any option to purchase the equipment at the end of the four$-$year lease term, nor does it include a

provision for ownership transfer. Five equal payments of $$10,000$ per year are required by the terms of the lease, with the first

payment due upon signing. Quattro's incremental borrowing rate is $8$ percent, but its implicit interest rate is unknown.

Present value of an annuity at $8\%$ for $5$ years $=3\mathrm{.}993$

Present value of an annuity at $8\%$ for $4$ years $=3\mathrm{.}312$

On its December $31,$ Year $1,$ financial statements, Quattro would display the following amounts in the indicated accounts under

U$.$S$.$ GAAP:

C$.$ $$43,120,$$$5,390,$$$33,120$

D$.$ $$43,120,$$$4,312,$$$33,120$