YYZ LTD signed a $5$ year financial lease agreement on equipment. The minimum lease payments were R$100000$ per annum., with titles to pass to

YYZ LTD at the end of the lease term. The equipment has an estimated useful life of $8$ years. The straight line method of depreciation is used. The

minimum lease payments were determined to have a present value of R$654896$ an effective interest rate of $10\%.$ It should be recorded as

Question $7$

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A$.$ Interest expense of R$65489\mathrm{.}6$ and depreciation of R$81862$

B$.$ Interest expense of R$65490$ and deprecation of R$130979$

C$.$ Interest expense of R$50000$ and depreciation of R$81862$

D$.$ rent expense or $100000$