On January $1,2021,$ Loop Inc. lease a machine from Sharp Co$.$ The machine is estimated to have a fair value of $$400,000$ and an $8-$year economic life with no salvage value. The lease term is non cancelable $3$ years. The lease requires annual rent payments of $$67,000$ due at the beginning of each year, starting January $1,2021.$ The machine is expected to have a residual value at the end of the lease term of $$250,000$ which is unguaranteed.

Loop paid $$3,000$ to a real estate broker as a commission for finding the lessor.

The lesse $($loop inc$)$ appropriately classified the lease as an operating lease.

The PV of annuity due of $1$ for $3$ years @ $5\%$ is $2\mathrm{.}85941$

The PV of an ordinary annuity of $1$ for $3$ years @ $5\%$ is $2\mathrm{.}72325$

In its $2021$ income statement, what amount of expense should Loop report from this lease transaction?

a$)$ A lease expense of $$68,000$

b$)$ An interest expense of $$6,229$ and amortixation expense of $$61,771$

c$)$ An interest expense of $$6,229$ and amortization expense of $$60,771$

d$)$ A lease expense of $$67,000$