4. On January 1, Sepe Vineyard Supply leased a truck for a five-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. The lessee interest rate is 5% and the truck economic life is 7 years. What amount, if any, should be recorded as the right-of-use asset (leased asset-truck) and lease liability at the inception under this rental agreement? A) 0 B) $3,000 C) present value of $3,000 D) present value of $11,000

Can you help me with this problem with step by step explanation, please?

King Company leased equipment from Mann Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $52,538 over a six-year lease term (also the asset’s useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 5%. The asset being leased cost Mann $230,000 to produce. Required:1. Determine the price at which the lessor is “selling” the asset (present value of the lease payments).2. What would be the amounts related to the lease that the lessor would report in its income statement for the year ended December 31 (ignore taxes)?