On January 2, 2021, Sunland, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $240000 starting at the beginning of the first year, with title passing to Sunland at the expiration of the lease. Sunland treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Sunland uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $1413416, based on implicit interest of 11%. In its 2021 income statement, what amount of amortization expense should Sunland report from this lease transaction? $141342 $240000 $118228 $94228

On January 2, 2021, Sunland, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $240000 starting at the beginning of the first year, with title passing to Sunland at the expiration of the lease. Sunland treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Sunland uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $1413416, based on implicit interest of 11%. In its 2021 income statement, what amount of amortization expense should Sunland report from this lease transaction? $141342 $240000 $118228 $94228

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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