The inception of a six-year capital lease is December 31, 2011. The agreement specifies equal annual lease payments on December 31 of each year. For the lessee, the first payment on December 31, 2011, includes:
A) Interest Expense: No, Reduction of the Lease Liability: Yes
B) Interest Expense: Yes, Reduction of the Lease Liability: No
C) Interest Expense: Yes, Reduction of the Lease Liability: Yes
D) Interest Expense: No, Reduction of the Lease Liability: No
