Not Ordinary Drones (NOD) , Inc., a lessor, leased a drone to Worldz Information Network, Ltd., [WIN], a lessee, on January 1, 2019. The following information relates to the leased asset and the lease agreement:

Fair value of leased drone $Undisclosed

Lease 10 years

Useful life 15 years

Payment Due January 1

Payment frequency Annual

Annual Instalments starting January 1, 2019 $33,000

Estimated residual value at end of the lease, [as stated in the problem] $23,600

Interest rate implicit in the lease [unknown to the lessee] 7%

Interest rate incremental to the lessee 8%

Ownership of drone reverts to lessor at end of lease term

Year end for both companies December 31 Amortization method Straight line

Accounting standards used - NOD: ASPE & - WIN: IFRS

Assume for Questions [41] - [46] below that the residual value of the leased asset was not guaranteed.

The journal entry prepared by WIN to record the lease contract on January 1, 2019 would be

a. DEBIT-Right of Use Assets [$260,000]; CREDIT-Obligation Under Capital Lease [$260,000].

b. DEBIT-Right of Use Assets [$250,090]; CREDIT-Obligation Under Capital Lease [$250,090].

c. DEBIT-Right of Use Assets [$250,090]; CREDIT-Cash [$250,090].

d. DEBIT-Right of Use Assets [$239,147]; CREDIT-Obligation Under Capital Lease [$239,147].

e. DEBIT-Right of Use Assets [$330,000]; CREDIT-Obligation Under Capital Lease [$330,000].