a corporation leased a building from a compagny. Then ten-year lease is recorded as a capital...
a corporation leased a building from a compagny. Then ten-year lease is recorded as a capital lease. The annual payments are $10 000, and the recorded cost the the assest is $67 100. The straightline method is used to calculate depreciation. which of the following statements is true ? a- No interest will be recorded, b- No depreciation expense will be recorded, c- depreciation expense of $6710 will be recorded each year, d- depreciation expense of $10 000 will be recorded each year
Homework Answers
As the asset is recorded as capital lease depreciation has to be recorded.
So, depreciation = Cost of asset / useful life = 67100 / 10 =6710 per year
Option C is the answer
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