connect Ch. 15 Test Question 4 jof 12) 4 10.00 points MC Qu 73 LO 15-05 XYZ Comp

Question

connect Ch. 15 Test Question 4 jof 12) 4 10.00 points MC Qu 73 LO 15-05 XYZ Company leased equipment to West Corporation under a lease agreement.. XYZ Company leased equipment to West Corporation under a lease agreetment that qualfies as a capital ease to West but not as a result of a bargain purchase option or a title transfer. The present value of the asset is 5650.000 The expected economic lifc of the asset is 30 years. The loase term is tive years. Using he straight-ine method, what wouid West record as annual depreciation $128.285 $130,000. O O $65,000 Multipie Cholce TOSHIBA 2 3 4 5 6 tab 9

Explanation / Answer

Answer is $1,30,000.

The Present value of the asset is 650000. It should be depreciated over 5 years.

6,50,000/5 = 1,30,000

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