Welby County Hospital entered into a capital lease to purchase a new MRI machine. The capitalizable cost of the equipment was $400,000 and the hospital made a $40,000 down payment

The entry required when the asset was acquired was

Debit Credit
A. Equipment
Other Financing Sources – Capital Lease
Cash $400,000
$360,000
40,000
B. Expenditures
Other Financing Sources – Capital Lease
Cash $400,000
$360,000
40,000
C. Equipment
Expenditures
Lease Payable
Cash $360,000
40,000

$360,000
40,000
D. Equipment
Lease Payable
Cash $400,000
$360,000
40,000

D