Gambet Labs Entered into a Lease Agreement on January 1,20X3,to $\begin{array} { c c c } \text { Machine Leasehold } & 50,553 & \\\text { Eapital Lease Liability } & & 50,553 \\\end{array}$

Gambet Labs entered into a lease agreement on January 1,20X3,to use an x-ray machine.The machine has a useful life of 6 years.Gambet Labs will make annual lease payments of $13,000 for 6 years,beginning on December 31,20X3.Assume a 14% interest rate.Using the present value tables,what journal entry will Gambet Labs make on January 1,20X3?

A) $\begin{array} { c c c } \text { Machine Leasehold } & 50,553 & \\\text { Eapital Lease Liability } & & 50,553 \\\end{array}$

B) $\begin{array}{lccc}\text { Machine Leasehold } & 7,000 & \\\text { Capital Lease Liability } & & 78,000 \\\end{array}$

C) $\begin{array}{lccc}\text { Machine Leasehold } & 50,553 & \\\text { Deferred Interest Expense } & 27,447 & \\\text { Capital Lease Obligation } & & 78,008 \\\end{array}$

D) $\begin{array}{lccc}\text { Machine Leasehold } & 7,000 & \\\text { Interest Iayzble } & & 27,447 \\\text { Capital Lease Liability } & & 50,553\end{array}$
E) No journal entry is necessary.