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Laurel Inc. entered into a 4-year lease agreement for equipment requiring $8,000 annual payments, with...

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Accounting

Laurel Inc. entered into a 4-year lease agreement for equipment requiring $8,000 annual payments, with the first payment due immediately. The lease does not contain a renewal or purchase option, and the asset reverts to the lessor at the end of the four-year period. The lessee's incremental borrowing rate is 7%, and the implicit rate of the lease is 8%, as known by the lessee. Just prior to the lease commencement, the lessee (a) incurred legal fees to execute the lease of $800,(b) received $2,500 from the lessor as a lease incentive to sign the new lease, and (c) made the first annual payment of $8,000. What is the amount of the rightof-use asset recognized by Laurel Inc. at the commencement of the lease?
A. $28,566
B. $33,566
C. $28,764
.$26,917
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