Your Company leases a building on December $31,2019.$

Lease term is $7$ years with equal payments of $$7,652$ at the beginning of each lease year.

The estimated economic life is $7$ years.

The fair value at the commencement of the lease is $$50,000$ and there is a guaranteed

residual value of $$3,000.$ Your company expects the residual value to be $$3,000$ at the end of

the lease term.

Ownership does not transfer, no bargain purchase option, and not a specialized asset.

Lessor desires a $6\%$ return which is known to Your Company.

What is the journal entry to record the Lease on December $31,2019?$

A$.$ DR Right of Use Asset $$53,000$; CR Lease Liability $$53,000$

B$.$ DR Right of Use Asset $$53,654$; CR Lease Liability $$53,564$

C$.$ DR Right of Use Asset $$45,279$; CR Lease Liability $$45,279$

D$.$ DR Right of Use Asset $$50,000$; CR Lease Liability $$50,000$

How is the answer C$?$