On January 1, 2019, Blue Co. leased a new machine from Green Co. The following information pertains to the lease:Lease term 5 yearsAnnual rental payable at beginning of each year $ 55,000 Useful life of machine 7 yearsBlue’s incremental borrowing rate 12 %Implicit interest rate in lease (known by Blue) 10 %Present value of annuity of $1 in advance for 5 periods at 10% 4.17 12% 4.04 The cost of the machine on Green’s accounting records is $214,500. It is customized for Blue’s use with no alternative use to Green at the end of the lease term. At the beginning of the lease term, Blue Co. should initially record a right-of-use asset ofa. $214,500b. $222,200c. $229,350d. $174,350

A. economic resources to be used or turned into cash within one year. b. reports assets, liabilities, and stockholders' equity. c. decrease assets; increase liabilities and stockholders' equity. d. increase assets; decrease liabilities and stockholders' equity. e. an exchange or event that has a direct and measurable financial effect. f. accounts for a business separate from its owners. g. the principle that assets should be recorded at their original cost to the company. h. a standardized format used to accumulate data about each item reported on financial statements. i. the basic accounting equation. j. the two equalities in accounting that aid in providing accuracy. k. the account credited when money is borrowed from a bank using a promissory note. l. cumulative earnings of a company that have not yet been distributed to the owners. m. every transaction has at least two effects. n. amounts presently owed by the business. transaction, separate entity assumption, balance sheet, liabilities, assets, current assets, notes payable, duality of effects, retained earnings, debit.